Valero has agreed to pay $320.5 million for LyondellBasell's former Houston refinery, a roughly 700-acre site along the Houston Ship Channel that has sat idle since the company ceased refining operations there. The deal, subject to closing adjustments, would hand Valero a facility sitting right next door to its own existing Houston refinery, along with 13.5 million barrels of storage capacity and logistics infrastructure that includes marine docks, rail-loading facilities and truck racks.
LyondellBasell confirmed the agreement Friday, saying it has entered into a deal to sell the former Houston Refinery site and related assets to Valero Refining-Texas, according to a GlobeNewswire release. As part of the transaction, Valero is assuming responsibility for ongoing site operations as well as environmental liabilities, pension costs and related employee obligations tied to the property, per LyondellBasell's announcement.
The refinery dates back to 1918 and had produced gasoline, diesel and jet fuel before LyondellBasell idled it, according to Chron. The outlet reported the site had employed about 400 workers before the shutdown and that LyondellBasell had planned to lay off 345 workers as the refinery closed.
Why LyondellBasell Walked Away From Refining
LyondellBasell said the sale followed its broader decision to cease refining operations and a subsequent evaluation of options for the property, according to the company's release. Per Chron's reporting, the company had shut down the refinery in February 2025 as it decided to leave the refining business altogether — though Oil & Gas Journal reported the shutdown occurred in March 2025 after delays, a discrepancy the available record does not resolve.
Before settling on a sale, LyondellBasell had considered converting the property into an advanced recycling facility, Chron reported, but the company deferred a final investment decision while weighing market conditions. LyondellBasell chief executive Peter Vanacker said the agreement provides continued employment for the site's workforce, framing the deal as a way to realize value from a non-core asset while positioning the site, its infrastructure and its employees with a refining-focused owner. Vanacker added that the transaction reflects a disciplined approach to transforming LyondellBasell's portfolio and creating long-term value, per Chron's reporting.
Valero's Plan to Fire the Plant Back Up
Valero expects to initially restart 165,000 barrels per day of light sweet crude processing capacity by the end of 2027, the company said, according to a Yahoo Finance report. Valero also indicated the acquisition could eventually support investment in equipment capable of processing high-complexity, heavy sour crude, though no financial details or timetable for that additional work have been disclosed, as reported by Oil & Gas Journal.
Valero said the move could also help address intermediate feedstock shortages across its U.S. Gulf Coast refining system, reducing its reliance on third-party purchases, the trade publication reported. Valero executive Lane Riggs said the acquisition offers a chance to expand the company's Gulf Coast footprint at a fraction of replacement value while strengthening its refining system, according to Chron.
Deal Still Needs Regulatory Sign-Off
The transaction is expected to close by the end of 2026, but it remains subject to regulatory approvals and other customary conditions, per the same reporting. LyondellBasell's announcement specifies that closing depends on required regulatory approvals or the expiration of applicable waiting periods, in addition to satisfaction of customary closing conditions.
The sale lands the same day LyondellBasell reported third-quarter 2026 net income of $758 million, according to the company's own earnings release. Chron also reported the company posted $8.5 billion in third-quarter revenue the same day the sale was announced.
The Houston transaction arrives amid a broader pullback in U.S. refining capacity. The Energy Information Administration has noted that national refining capacity decreased during 2025, and separately flagged that the Valero Benicia refinery in California also ceased refining operations, with its capacity removed from the agency's monthly estimates as of March 2026, according to the EIA.
