LyondellBasell said Tuesday that the Houston refinery it plans to close this year could make way for a hydrogen plant.
The hydrogen plant will be part of one of two regional hubs — one in Houston, the other in Cologne, Germany — that the chemicals giant said would be key to a company-wide transformation aimed at making it a leader in the energy transition and in recycled plastics.
Hydrogen — a theme that dominated CERAWeek, the massive energy conference held downtown last week — is gaining traction as a fossil fuel alternative in Houston, where some of the world’s largest energy companies see it as key to efforts to decarbonize their operations. As fossil fuels fade from prominence in the decades ahead, hydrogen could also give Houston a chance to maintain its regional energy employment base and gain a foothold in the global energy economy.
“The Houston refinery could play a very important role for the future,” CEO Peter Vanacker said Tuesday in an interview, “because it could be the piece of the puzzle we have to build the circular and low-carbon solution center in the Gulf Coast.”
Houston-based LyondellBasell said in October it would partner with Chevron, Paris industrial gas firm Air Liquide and German energy company Uniper to pursue a Gulf Coast hydrogen project. The consortium’s preferred location for the plant is the Houston refinery, said Ken Lane, LyondellBasell’s executive vice president of olefins and polyolefins.
Lane said that with pipelines connecting it to crackers in Channelview, its central location and access to the Houston Ship Channel, the refinery is well positioned for conversion. The company may decide to repurpose some of the refinery equipment there to process new low-carbon feedstocks that it can then ship to Channelview.
“It’s going to be a great opportunity for us to further develop that site,” Lane said. “No final decision has been made yet, but we are excited about the possibilities this site holds for the future.”
Whether or not the refinery is converted to a hydrogen facility, the site will be key to the company’s Houston hub strategy because of its pipeline connections to Channelview, where it has one of the region’s largest petrochemical hubs. The offer to buy the refinery therefore pales in comparison to the value the company sees on the site, Vanacker said on Tuesday.
“This value opportunity for our company is much more important than any offer we have received,” he said.
The site remodel will allow the company to keep jobs in the Houston region while it adjusts its overall strategy, the company said. Vanacker said there is value in the skills concentrated in refineries and chemicals along the Gulf Coast.
“It’s a lot easier than if you have to bring somebody in to learn how to run these assets,” he said, “and how to handle all the different aspects of technology.”
