MOSCOW (MRC) -- LyondellBasell Industries has retained Bank of America Merrill Lynch to help with the potential sale of its 263 Mbpd refinery in Houston, according to two people familiar with the talks, reported Reuters.
The move comes after the Dutch chemical company fielded inquiries from at least four possible suitors, the sources said. The process is expected to start in earnest after the US Labor Day holiday in early September, one of the two sources said.
The Houston unit is a significant Gulf Coast refinery that can run a wide variety of crude oils, from light Bakken to heavier grades out of Canada. A sale could bring increased competition among Gulf Coast refiners as two of the potential bidders have no presence in the US refinery row.
Valero Energy Corp, Saudi Aramco, Cenovus Energy Inc. and Suncor Energy Inc. are among the companies that have expressed interest in the refinery, said the sources, who requested anonymity because they are not authorized to discuss the talks.
Canadian energy firms Suncor and Cenovus do not have any refineries in the Gulf Coast, and the Houston unit would give them a place to process heavier Canadian crudes they produce.
A LyondellBasell Industries spokeswoman said in an email Thursday: "We believe that in the longer term, the refinery may be more valuable as part of a larger refining system. We are exploring all options. However, no decisions have been made."
Earlier this year, LyondellBasell Industries Chief Executive Bob Patel told attendees at an industry conference that he expected the refinery would eventually be put on the selling block, but did not offer any time frame.
"In the longer term, I can't help but think it's more valuable as part of a refining system than as part of a chemical company," Patel said.
Lyondell management has consistently described the Houston refinery as a primary source of feedstocks for the company's petrochemical plants, three of which are in industrial suburbs of Houston.
In 2005, Lyondell and minority partner Citgo Petroleum Corp. put the refinery up for sale to end a partnership that had unraveled after 12 years.
The bids for the plant reached between USD5 B and USD6 B before the sale was canceled and Lyondell bought out Citgo's minority stake for USD2.1 B, or USD19,000/bbl of crude oil refining capacity.
Since that time, US refinery values have fallen drastically with plants selling for less than USD5,000/bbl.
As MRC informed before, Showa Denko K.K., JX Nippon Oil & Energy Corp. (JX), and LyondellBasell Group have reached final agreement concerning the sale and purchase of LyondellBasell’s shares in SunAllomer Ltd. (SunAllomer), a joint venture (JV) company among the three parties for the development, production and sale of polypropylene (PP) and PP-based advanced materials. Specifically, SDK Sunrise Investment (SSI), owned by SDK and JX, will purchase LYB’s 50% stake in SunAllomer effective August 31, 2016. After the acquisition, an absorption-type merger of SSI and SunAllomer will take place on November 1, 2016 with SunAllomer as the surviving company.
LyondellBasell is one of the world's largest plastics, chemical and refining companies and a member of the S&P 500. LyondellBasell manufactures products at 57 sites in 18 countries. LyondellBasell products and technologies are used to make items that improve the quality of life for people around the world including packaging, electronics, automotive parts, home furnishings, construction materials and biofuels. Hostacom and Hifax are trademarks owned by LyondellBasell. The manufacturing facilities in India are owned and operated by Basell Polyolefins India Pvt. Ltd., a wholly-owned subsidiary of LyondellBasell.
MRC