“What if these very grounds beneath us could speak?” they might tell a tale of transformation. The tale is about the Lyondell-Citgo Houston Refinery. It stands as a testament to Houston’s industrial might.
Since 1918, this refinery has processed crude oil. It transforms it into essential products that fuel our lives. Gasoline, diesel, and jet fuel are made here. Lubricants and petrochemical feedstocks are also created. The Lyondell-Citgo Houston Refinery has a rich history.
Harry Sinclair started it as a battery still. He was with Sinclair Oil. Over time, the refinery expanded. New units were added to produce lubricants and chemicals. In 1952, a fluid catalytic cracker was added. A coker followed in 1968. The refinery became one of the first full-conversion refineries on the Texas Gulf Coast.
Atlantic Richfield acquired Sinclair Oil in 1969. Arco saw potential synergies with its Channelview chemical complex. Arco invested heavily in the refinery. The expansion allowed processing heavy sour crude. This produced refined products and chemical plant feeds. Two ethylene crackers were built at Channelview. They processed naphtha and heavier liquids.
The 1980s brought challenges. Commodity chemicals faced oversupply. Arco’s Houston assets declined. Bob Gower proposed combining the chemical plant and refinery. This created a single business unit. Lyondell Chemical became an Arco subsidiary in 1985. Gower’s plan revitalized the operation.
Arco offered 50.1% of Lyondell Chemical to the public in 1988. This was via an initial public offering. Lyondell would pay out all excess cash flow as special dividends. Arco initially struggled to sell its stake. They repurchased shares. This gave Arco a 49.9% interest in the Houston refinery.
Lyondell operated as a merchant refiner. It wasn’t obligated to buy crude from Arco. Nor was it required to sell products to Arco’s marketing. The lack of long-term crude contracts led to raw material cost swings. Lyondell considered selling the refinery.
Talks began in 1990 with interested parties. The Iraqi invasion of Kuwait disrupted these plans. Lyondell revived interest in a long-term crude supply agreement. Petroleos de Venezuela S.A. was a key participant. Lyondell negotiated a 25-year agreement with PDVSA.
In 1993, CITGO joined Lyondell. They formed the Lyondell-CITGO Refinery Company. Lyondell owned 58.75%. CITGO owned 41.25%. Lyondell Chemical bought CITGO’s share in 2006. Houston Refining became a wholly owned Lyondell subsidiary.
The Lyondell-Citgo Houston Refinery could process 268,000 barrels of crude oil per day. It produced 120,000 barrels of gasoline daily. Diesel production reached 95,000 barrels per day. Sweet Crude run capacity was 7,000 barrels per day. Naphthenic Lube oils reached 3,600 barrels per day. White Oil production reached 850 barrels per day.
The refinery marked its 100th anniversary in 2018. It has adapted to industry challenges. It has also adapted to market instabilities. It stands as one of the largest refineries in the U.S.. Generations of employees shaped its culture.
LyondellBasell announced plans to close the refinery by the end of 2023. Strong refining margins delayed the closure to Q1 2025. The Lyondell-Citgo Houston Refinery’s story is nearing its end. Its legacy on the Texas Gulf Coast will endure.