(Reuters) - LyondellBasell Industries interim Chief Executive Kenneth Lane said that operating the chemical producer's 263,776 barrel-per-day (bpd) Houston crude oil refinery past 2023 would require "significant" capital investment.
Lane announced on April 21 plans to permanently shutter the refinery by the end of 2023. The company has said it no longer fits with the company's global chemical production.
Sources told Reuters the decision to close the refinery was because of needed overhauls at the refinery.
"While these decisions are never easy, operation of the refinery beyond next year would require significant capital investment," Lane said on Friday.
Lane also said the company will take the next several years to study a possible conversion of the 700-acre refinery site along the Houston Ship Channel into a processor of pyrolysis oils, which can be used to make renewable diesel.
"It's way too early for us to be talking about repurposing costs for the refinery," Lane said.
"Our priority right now is going to be really to stay focused on taking advantage of what we see in the marketplace today and really achieving a great result there and operating the assets safely," he added.
The refinery operated at 95% of its capacity in the first quarter of this year to benefit from high profits as demand recovers from COVID-19 lockdowns over the past two years.
Lyondell took a $624 million impairment charge for its review of strategic options for the refinery.
One of the major projects needed at the refinery is a rebuild of a reactor in the 90,000-bpd gasoline-producing fluidic catalytic cracker, which could cost millions of dollars, the two sources told Reuters on Thursday.
