March 13, 2013 / 3:30 PM / 7 years ago

UPDATE 1-Lyondell Houston refinery changing crude slates

* Venezuela supplied about 50 pct of crude used in 2012

* Lyondell preparing refinery to triple Canadian crude usage

HOUSTON, March 13 (Reuters) - Lyondell Basell Industries NV is preparing its 268,000 barrel per day (bpd) Houston refinery to run new supplies of crude oil becoming available, especially from Canada, the company said in a presentation to Wall Street analysts on Wednesday.

The company is spending $50 million to nearly triple its capacity to run heavy Canadian crude at the Houston refinery, to 175,000 bpd from 60,000 bpd.

The overhaul to convert a crude distillation unit and a coking unit to refine crude from Canada’s tar sands fields in Alberta is “just finishing up,” Chief Executive Jim Gallogly said. The work began in mid-February and is expected to be completed by mid-April.

Lyondell has already been changing the crude slate at the refinery, primarily as it moved away from a 13-year partnership with Venezuela’s national oil company Petroleos de Venezuela SA (PDVSA) that ended in 2006. Under that pact, heavy, sour Venezuelan crude was the primary feed for the plant.

Use of Venezuelan crude fell sharply between 2009 and 2012 at the Houston refinery, Lyondell said. About 50 percent of the crude used in 2012 was from Venezuela, down from 86 percent in 2009.

While the refinery is preparing to triple the volume of Canadian crude it can run, new pipelines like TransCanada’s controversial Keystone XL will be required to ship oil from Alberta’s tar sands fields to U.S. Gulf Coast refineries. The earliest the Keystone XL will be available is 2015.

A pipeline between Canada’s tar sands oil fields and the U.S. Gulf Coast could offer transportation cost savings for Lyondell of up to $200 million over shipment by rail, the company said. Pipeline shipment would cost $8 per barrel, while rail shipment would cost $15 to $16 a barrel.

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