Lyondell Houston oil refinery sale in focus ahead of investor call

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HOUSTON, Jan 24 (Reuters) - Chances for a quick sale of LyondellBasell Industries' (LYB.N) Houston oil refinery are dwindling with several other refineries competing for buyers, said people familiar with the matter on Monday.

The petrochemical maker put the 263,776 barrel-per-day plant on the market for a second time last fall after eking out a small third-quarter profit from the unit. Its then-chief executive officer predicted a deal within a quarter or two.

The marketing effort has coincided with other deals. Phillips 66 (PSX.N) put a Louisiana refinery on the block last summer and later opted to convert the plant to oil storage. Shell Plc (RDSa.L) also last year tried to sell a Louisiana refinery, but took it off the market and is considering converting it to bio-diesel production.

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Marathon Petroleum Corp (MPC.N) said in November it was in talks to sell an Alaska oil-processing plant. That plant has not sold.

Lyondell's sales efforts are continuing, the people familiar with its process said. Quarterly earnings are due out Friday, and the company could update investors.

"LyondellBasell continuously evaluates business conditions, our portfolio, and a wide range of options for managing the company," company spokesperson Chevalier Gray said in response to questions on the marketing effort. She declined to discuss the status of the planned sale.

PBF Energy (PBF.N)has toured the plant on the Houston Ship Channel that is home to the largest U.S. collection of petrochemical plants.

A PBF spokesperson did not respond to a request for comment.

Refiners Marathon, the largest U.S. refiner, Motiva Enterprises (MOTIV.UL) and Chevron Corp (CVX.N) have been interested in the operation at times, the people said.

Marathon and Chevron declined to comment. A Motiva spokesperson did not respond to a request for comment.

The Lyondell plant is a full-conversion refinery, meaning it can process cheaper high-sulfur heavy crude oil into motor fuels that meet U.S. environmental standards.

"The Lyondell sale saga has been going on for some time and it's going to continue," said Andrew Lipow, president of energy consultancy Lipow Oil Associates.

In 2016, Lyondell received interest from at least four suitors and hired an investment bank to weigh its options. The plant was later taken off the market after it was unable to agree on a sales price, people said at the time.

As OPEC has tightened production the cost advantage for heavy, sour crude has narrowed, leading some analysts to say the refinery is less attractive.

John Auers, vice president with oil and refining consultancy Turner, Mason, noted the potential for heavy-conversion plants to regain favor.

"I think it's going to be more attractive as OPEC opens up marginal supply," he said, noting it has been running heavy crude oil from Canada’s Alberta oilfields.

"Canadian crude is in abundant supply," Auers said.

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Reporting by Erwin Seba; Editing by Richard Chang

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