HOUSTON (Reuters) -LyondellBasell Industries will begin the permanent closure of its 263,776 barrel-per-day Houston refinery this coming weekend, said people familiar with plant operations.

Layoffs of up to 400 employees at the refinery are scheduled to start two months after the shutdown begins, the sources said.

The company said on Wednesday it is following a planned schedule to close the refinery.

"LyondellBasell is on schedule to cease refining operations at the Houston Refinery at the end of the first quarter of 2025," the company said in an emailed statement.

"As previously mentioned, the gradually planned ramp down begins toward the end of January and continues through February. Our focus is on safely ceasing refining operations to protect the community, environment and our workers," Lyondell said.

Lyondell first announced plans to shut the refinery within a year in 2023, after failing in attempts over seven years to sell it, but extended the timing of the closure by a year to the first quarter of 2025.

The company plans to convert existing hydrotreaters at the refinery site along the Houston Ship Channel for use with equipment - to be added after 2027 - that will produce plastic pellets from recycled plastic items.

Hydrotreaters use hydrogen to remove sulfur from motor fuels in compliance with U.S. environmental rules.

Lyondell plans to shut the first of two crude distillation units (CDUs) and an associated coker in January. The second CDU, units fed by it and its associated coker, will shut between mid and late February.

CDUs begin the refining of crude oil by breaking it down into feedstocks for all other units at the refinery. Cokers convert residual crude oil into either feedstocks for motor fuels or petroleum coke, a coal substitute.

The Lyondell plant is the first of two U.S. refineries planned for closure this year. Phillips 66 said in October it will shutter its Los Angeles refinery by the end of 2025.

Valero Energy is reviewing the future of its two California refineries for possible closure, citing the state's plans to phase out sales of new gasoline-powered automobiles by the middle of the next decade.