HOUSTON, Texas (KTRK) -- The future plans of the LyondellBasell refinery in southeast Houston are up in the air after the company's announcement that it will close by the end of 2023.
The European company announced Thursday that they are getting out of the refining business. Their interim CEO, Ken Lane, called it the "best strategic and financial path forward for the company" and will allow them to work towards their decarbonization goals.
LyondellBasell's announcement came days after they released their plan through 2030. In it, they announced goals to "help end plastic waste in the environment, address climate change and support a thriving society."
"There is another theme in Europe - it's a much faster pace of decarbonization and energy transition," Tom McNulty, who has worked in the energy industry for decades, said. "A lot of the European companies tend to be moving a little more quickly to try to divest heavier carbon assets."
McNulty said there is still significant demand for crude oil refined products, so he does not anticipate that other refineries in the area will follow suit in the short-term.
"We often forget about Asia, Africa, and Latin America," McNulty said. "There is a lot of demand in the developing world for diesel, gasoline, and certainly jet fuel. I think the demand is still there, and the erosion over time will be very slow."
The LyondellBasell facility has the capacity to convert 268,000 barrels of crude oil a day into transportation fuel and other products.
It is more than 100 years old and sits on almost 700 acres. It was one of the first petroleum refineries on the Houston Ship Channel.
"LyondellBasell will continue to consider potential transactions and alternatives for the site," the company said in a statement. "The site's prime location may provide options at some point in the future for the company to advance its strategic objectives, including circularity."
Currently, 550 employees work at the plant, who the closure will displace.
"We are committed to do everything we can to assist our people through this transition," the company said in a statement. "We are evaluating options for the affected employees."
They are said to be in touch with the Steelworkers Union and plan to meet with them in the coming weeks.