Valero has agreed to buy LyondellBasell’s shuttered Houston refinery, next to its own Houston plant. It plans to restart 165 Mb/d of light-sweet crude processing capacity by year-end 2027, with an option to add heavy-sour processing later. LyondellBasell stopped running crude at the 264-Mb/d site in Q1 2025.
For the domestic crude market, phase one creates about 165 Mb/d of new Ship Channel demand for light-sweet grades. Those are many of the same barrels that supply the export docks, where crude exports averaged a record 5.6 MMb/d in April, and 4.2 MMb/d this October, per RBN's Crude Voyager. It extends the pattern described in our May blog about how Gulf Coast refiners are absorbing incremental light crude that would otherwise be exported. Valero’s deal materials also show the restarted plant supplying FCC and hydrocracker feed to Valero’s own system (which includes a 255 Mb/d refinery neighbouring the Lyondell plant and another 260 Mb/d refinery in Texas City), reducing what it buys from third parties.
The heavy-sour phase would make Valero a new heavy-crude buyer in Houston, since its existing Houston refinery runs sweet crude. Valero set a Q3 record for Venezuelan crude runs and calls heavy-sour debottlenecking a priority. If Valero builds it, it would compete for Canadian and Latin American heavy grades. For now, Valero describes it as an opportunity, not a commitment.
