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SAN FRANCISCO -- Lyondell Chemical Co. purchased CITGO Petroleum Corp.'s 41.25 percent share in the companies' Lyondell-CITGO refinery for $2.1 billion.
CITGO's sell-off of its stake in the refinery further strains the relationship between the partners. Last month, the two companies abandoned an auction to sell the refinery. CSNews Online reported then that offers from interested parties exceeded $5 billion, but Lyondell said it determined that the offers were not enough to persuade the companies to sell its ownership of the refinery's 268,000 barrel per day capacity.
The purchase, made when refining margins are high, will immediately add to the company's bottom line and reduce its debt load, according to Lyondell. At the same time, it has entered into a five year contract to buy 230,000 barrels of crude oil from Petroleos de Venezuela S.A. to ensure steady supply. Petroleos wholly-owns its subsidiary CITGO. Terms of the contract were not disclosed, but Lyondell told Dow Jones that the crude would be purchased at market price.