Valero Energy Corp. said Oct. 30 that its subsidiary, Valero Refining-Texas LP, agreed to acquire LYB Houston Hub Holdings LLC from LyondellBasell Industries for $320.5 million, subject to closing adjustments. The company indirectly owns an approximately 700-acre former refinery site on the Houston Ship Channel, adjacent to Valero's existing Houston refinery.

Valero expects to restart 165,000 barrels per day of light, sweet crude processing capacity at the site by year-end 2027. The acquisition also provides an opportunity for future investment in equipment to process heavy, sour crude, although Valero did not disclose a timeline or investment amount for that expansion.

The property includes 13.5 million barrels of storage capacity and logistics infrastructure such as marine docks, rail-loading facilities and truck racks. According to Valero's transaction presentation, the site also offers pipeline connections and opportunities to integrate operations with Valero's existing Gulf Coast refining network.

Valero said the acquisition could help address intermediate feedstock shortages across its Gulf Coast refineries by reducing reliance on third-party purchases. Additional fluid catalytic cracking (FCC) and hydrocracking feed production at the site could supply other operations, while available hydrotreating capacity could be used to upgrade intermediates from Valero's other regional refineries.

LyondellBasell announced in April 2022 that it would exit the refining business, initially targeting the end of 2023 for closure of its Houston facility. The company later delayed the shutdown until the first quarter of 2025, citing favorable inspections and continued operating performance. Refining operations ceased in February 2025 after more than a century at the site. Following the closure, LyondellBasell evaluated other uses for the property, including chemical recycling and production of renewable and bio-based feedstocks, before agreeing to sell the site to Valero.

Why it Matters

The planned restart comes after a period of declining U.S. refining capacity. The U.S. Energy Information Administration (EIA) reported that operable atmospheric distillation capacity fell by more than 250,000 barrels per calendar day during 2025, to 18.2 million barrels per calendar day as of Jan. 1, 2026. The closures of LyondellBasell's Houston refinery and Phillips 66's Los Angeles refinery accounted for a combined reduction of approximately 400,000 barrels per day. According to EIA, the Houston closure alone represented about 3% of Gulf Coast refining capacity, although regional capacity declined by less than 2% after accounting for increases at other facilities.

Valero's proposed restart would return refining activity to the Houston site while adding storage, transportation and intermediate-processing capabilities to its regional operations.

The transaction is expected to close by year-end 2026, subject to customary conditions. LyondellBasell's initial plant-closing layoffs targeted 345 of its 400 workers, according to The Houston Chronicle. The agreement with Valero provides for continued employment of the site's small remaining workforce. Valero will assume responsibility for ongoing site operations, environmental liabilities, pension costs and related employee obligations.