Engineering News

Valero still interested in Lyondell-Citgo refinery
Tue May 23, 2006 3:32pm ET

NEW YORK, May 23 (Reuters) - Valero Energy Corp. is "of course" still interested in buying Lyondell Chemical Co. and Venezuelan-owned Citgo Petroleum Corp.'s joint venture 268,000 barrel per day refinery in Houston, Texas, the company's top executive said on Tuesday.

Chief Executive Bill Klesse, speaking at the UBS Global Oil & Gas Conference, said it "remains to be seen" what a potential price and any numbers would look like.

However, from a regulatory standpoint, "we believe when we look at the FTC (Federal Trade Commission) issues that Valero would be able to buy a refinery on the Gulf Coast of this size," he said.

"We believe regulatory-wise we could do that. We'd probably have a second request, but that would be up to the FTC."

San Antonio, Texas-based Valero, a leading U.S. refiner, has said before that it is interested in the refinery, which is 58.75 percent-owned by Lyondell and 41.25-percent owned by Citgo. The companies said earlier this year that they are considering a sale of the joint venture.

The refinery has complex units to maximize the volume of light products, such as gasoline, made from heavy sour Venezuelan crude, which typically sells at a discount to lighter, sweeter grades.

The heavy crude nature of the refinery is "kind of our cup of tea," according to Klesse.

In wide-ranging comments, Klesse also said he expects gasoline demand to come back, despite the recent rise in prices.

"Gasoline demand year to date has been very good. With the big movement in price, clearly we saw some flattening of demand," he said.  

Source: Reuters

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