LyondellBasell Industries, a major chemical company, is set to begin the permanent closure of its 263,776 barrel-per-day Houston refinery this weekend, ie January 26, according to media reports.

The shutdown, which will occur over several weeks, marks the end of an era for the facility. Up to 400 employees are expected to be laid off in the coming months, following the completion of the closure process.

LyondellBasell acknowledged the planned closure in a statement, emphasizing a focus on safety throughout the process. The company has been gradually ramping down operations since late January, with the final stages anticipated to conclude by the end of the first quarter of 2025.

The decision to close the refinery comes after years of unsuccessful attempts to sell the facility. While initial plans called for closure within a year of the 2023 announcement, the timeline was extended by a year.

Instead of continuing refining operations, LyondellBasell intends to repurpose the site. Existing hydrotreaters, which currently remove sulfur from fuels, will be adapted for use in a new project. After 2027, the company plans to install equipment that will produce plastic pellets from recycled plastic waste. This shift reflects a growing focus on sustainability and circular economy principles within the industry.

The closure of the LyondellBasell refinery is not an isolated incident. Phillips 66 announced plans to shutter its Los Angeles refinery by the end of 2025. Moreover, Valero Energy is currently reviewing the future of its two California refineries, considering potential closures in response to the state's ambitious plans to phase out the sale of new gasoline-powered vehicles by the middle of the next decade.

The closure of these refineries highlights several key factors impacting the oil and gas industry. Increasingly stringent environmental regulations, coupled with the rise of renewable energy sources and the shift towards electric vehicles, are creating significant challenges for traditional refining operations.

Furthermore, the economic viability of refining operations in certain regions is increasingly under pressure due to factors such as high operating costs, competition from overseas refineries, and declining demand for certain petroleum products.

The closure of the LyondellBasell refinery marks a significant shift for the Houston Ship Channel, a major hub for the energy industry. While the closure will undoubtedly have an impact on local employment, the company's plans to repurpose the site for plastic recycling demonstrate a potential path forward for the industry as it adapts to the evolving energy landscape.