Petrochemical manufacturer LyondellBasell Industries is still looking to sell its Houston refinery by mid-2022 even though it made a profit in the third quarter, CEO Bob Patel said in an investors call held late last week.
In September, LyondellBasell initially announced its interest in selling its only refinery, located on the Houston Ship Channel.
Patel told investors in last week’s call that while the Houston Refinery is a valuable, well-performing asset, LyondellBasell has long held the belief that the refinery may be even more valuable as part of a larger refining system.
“With regards to the process and the transaction, we're working through it now, and our aim is to move toward the transaction in the coming quarter or two,” said Patel regarding the refinery sale.
During the investors call, Patel said that as he prepares to leave the company at the end of the year, he has taken time to reflect on the company’s outlook. “Without a doubt, LyondellBasell's future is very bright. Because of the efforts of our incredibly talented and hardworking global team, we've built a company that has proven it can perform under a ranges of conditions.”
After six quarters in a row of negative adjusted earnings, the refinery earned $41 million EBITDA in the third quarter of 2021, CFO Michael Murray said, and those earnings could increase further through the end of the year if jet fuel demand continues to ramp up. The refinery ran at 97% of nameplate capacity, Murray said, up from the low-80s percentile in 2020.
“On the refinery, things have certainly turned positive,” Patel added. “We turned to profit in (the third quarter), and Q4 looks to be stronger than Q3.”
“With high oil prices, we're seeing more Canadian sour crude coming down to the U.S., which is causing the light-heavy differential to widen. That favors our refinery, and I think that trend could continue for the next quarter at least,” Patel said. “On the product side, distillate inventories are very low. Distillate cracks have expanded. We're seeing air travel get back to about 80% of pre-Covid levels in the U.S. Miles driven are back to pre-Covid levels now.”
The company produced net income of $1.76 billion from July through September, down about 14% from the second quarter but 15 times higher than the year-ago period.
