January 31, 2020 / 4:55 PM / 22 days ago

Lyondell Houston refinery ran at near full capacity in Q4 2019: CEO

HOUSTON (Reuters) - Lyondell Basell Industries’ Houston refinery operated at near full capacity in the fourth quarter of 2019, providing earnings before interest, taxes, depreciation and amortization (EBITDA) of $22 million, Chief Executive Bob Patel said.

The refinery ran at 1,000 barrels per day (bpd), or 0.3%, below its capacity, which the company places at 268,000 bpd, Patel said in a conference call on Thursday.

The Houston refinery has been able to run high-sulfur fuel oil as a feedstock in its crude distillation units (CDUs), Patel said, after HFSO dropped in price in the fourth quarter due to the switch to very low-sulfur fuel oil for ships on Jan. 1, 2020 under a mandate from the United Nations’ International Maritime Organization.

“We are able to run supplemental feed typically when we’ve cut back on crude run rates for a variety of reasons,” Patel said. “We can run between 20,000 and 40,000 barrels a day of additional HSFO. And I would say in a typical month, maybe that contributes $5 million to $9 million of additional EBITDA. So that gives you a sense for contribution.”

Lyondell has run HFSO while the production levels on its CDUs have been reduced.

“We did do some of that back in January because we had some external events that caused some downtime on one of our crude units and some internal issues,” Patel said.

The refinery’s two CDUs were cut back in January because of clogging in the initial intake sections of the units.

Asked about the refinery’s future as a Lyondell property, Patel said the company would see what develops in the long term.

“Again, our focus has been very consistent: run the refinery as well as possible, try to optimize on the product side so that we can maximize value, and we’re continually focused on that. And we’ll see how things play out longer term,” he said.

Reporting by Erwin Seba; editing by Diane Craft and Dan Grebler

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