UPDATE 1-LyondellBasell retains bank for potential Houston refinery sale -sources

Thu Aug 25, 2016 5:19pm EDT
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(Adds details on refinery, industry background, Valero no comment)

By Mike Stone and Jessica Resnick-Ault

NEW YORK/HOUSTON Aug 25 (Reuters) - LyondellBasell Industries NV has retained Bank of America Merrill Lynch to help with the potential sale of its 263,776 barrel-per-day refinery in Houston, according to two people familiar with the talks.

The move comes after the Dutch chemical company fielded inquiries from at least four possible suitors, the sources said. The process is expected to start in earnest after the U.S. Labor Day holiday in early September, one of the two sources said.

The Houston unit is a significant Gulf Coast refinery that can run a wide variety of crude oils, from light Bakken to heavier grades out of Canada. A sale could bring increased competition among Gulf Coast refiners as two of the potential bidders have no presence in the U.S. refinery row.

Valero Energy Corp, Saudi Aramco, Cenovus Energy Inc and Suncor Energy Inc are among the companies that have expressed interest in the refinery, said the sources, who requested anonymity because they are not authorized to discuss the talks.

Canadian energy firms Suncor and Cenovus do not have any refineries in the Gulf Coast, and the Houston unit would give them a place to process heavier Canadian crudes they produce.

A LyondellBasell Industries spokeswoman said in an email Thursday: "We believe that in the longer term, the refinery may be more valuable as part of a larger refining system. We are exploring all options. However, no decisions have been made." She declined to elaborate.

Lyondell has sent an email to employees that the refinery is for sale, according to sources who have seen the email.   Continued...