31 January 2014 21:31 [Source: ICIS news]
HOUSTON (ICIS)--LyondellBasell expects to resolve coker issues at its Houston refinery this quarter, but not before they cause further hits to the company's earnings, the CEO said on Friday.
The company first experienced the operating issues late in the fourth quarter, said CEO Jim Gallogly. He made his comments during an earnings conference call.
These problems lowered throughput during part of December, leading to an impact of $40m, he said.
He expects the coker problems to continue affecting operations in February, leading to the further hit in earnings. However this should be less than $20m.
By the latter half of February, the refinery should return to full operations, Gallogly said.
Later during the conference call, Gallogly talked to analysts about possible projects at the refinery.
When asked about "strategic alternatives" for the refinery, Gallogly said, "I haven't seen any refineries being sold for significant prices."
Moreover, LyondellBasell could still improve the refinery's performance, Gallogly said.
For now, such improvements do not call for a hydrocracker, which the refinery currently does not have, Gallogly said.
LyondellBasell contracts out the material that would normally be processed through a hydrocracker.
To justify a hydrocracker, LyondellBasell needs to compare the returns on such an investment versus other opportunities the company currently has, Gallogly said.
"And so far, other opportunities have been so strong that we haven't chosen to do that," he said.
"It remains an option for us to put more capital in, to complete the kit," Gallogly said. "But as I tell everybody, let's run the kit we have perfectly and then you can come talk to me about growing it."
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