LyondellBasell’s refinery is top choice for US hydrogen hub
HOUSTON (ICIS)–LyondellBasell’s refinery in Houston is the top choice for a site for a hydrogen and ammonia project that it may develop with other companies on the US Gulf Coast, an executive said on Tuesday – a further indication that the company may develop the refinery site as a sustainability hub instead of selling it.
LyondellBasell, Air Liquide, Chevron and Uniper are part of a consortium that is evaluating sites for the project on the Gulf Coast. The consortium is considering blue and green hydrogen.
Blue hydrogen is made with natural gas, with the resulting carbon dioxide (CO2) captured. Green hydrogen is made by using renewable energy to power electrolysers that split water molecules into hydrogen and oxygen.
“We’ve aligned with our partners in the consortium that the preferred location is going to be the Houston refinery,” said Ken Lane, executive vice president, global olefins and polyolefins for LyondellBasell. He made his comments during the company’s Capital Markets Day investor presentation.
No final decision has been made, Lane said.
The possibility that the refinery could become a hydrogen hub is further indication that LyondellBasell may call off plans to sell the site and develop it into a sustainability hub.
Back in September 2021, the company announced that it was considering selling the refinery. It can process 268,000 bbl/day of oil.
Later it announced plans to shut down the refinery by the end of 2023.
By April 2022, the company began indicating that it could repurpose some of the units of the refinery to form a chemical-recycling plant that would use its MoReTec process technology.
The technology breaks down plastics into pyrolysis oil, which can be fed into a cracker to produce olefins.
Critically, the Houston refinery already has pipelines that connect it to LyondellBasell’s crackers in Channelview, Texas.
“Everybody knows we have gone out in the markets. We have looked at getting offers on the table,” said Peter Vanacker, LyondellBasell CEO. He made his comments during the Capital Markets Day investor presentation. “But something also has changed. And what has changed is that we started to go deeper into how can we accelerate our Circular and Low Carbon Solutions business.”
LyondellBasell sells a portfolio of plastics under its Circulen brand that offers polymers made with mechanically recycled material, chemically recycled material or renewable feedstock.
“We see that there is a market that has a huge amount of value, not premium but value,” Vanacker said. “So let’s go after that.”
Meanwhile, the refinery has hydrotreaters, hydrocrackers and pipelines, he said.
“We can eventually retrofit part of those assets,” Vanacker said. “Bring the next MoReTec technology to the Houston refinery. Produce these circular or renewable hydrocarbons. Feed them into the pipeline in our steam cracker in Channelview.
“And that value opportunity for our company is much more important than any offer that we have received,” Vanacker said.
Thumbnail shows a truck carrying hydrogen. Image by Shutterstock.
Speak with ICIS
Now, more than ever, dynamic insights are key to navigating complex, volatile commodity markets. Access to expert insights on the latest industry developments and tracking market changes are vital in making sustainable business decisions.
Want to learn about how we can work together to bring you actionable insight and support your business decisions?