LIMA — Husky Energy is considering a revamp of its Lima Refinery to process up to 40,000 barrels per day of Canadian heavy crude, according to a Reuters news report.
Reuters said Husky spokesman Mel Duvall confirmed the company is considering the move, but Duvall declined to comment Monday on the possibility.
“Our downstream strategy is to continuously look at ways to increase our crude oil input flexibility, our product flexibility and ways to access the best markets at the right times,” Duvall said. “We have not made any announcements in regards to upgrades at the refinery.”
Husky has sanctioned preliminary engineering design for the project in the third quarter this year that, if approved, would revamp Lima’s existing process units and add new equipment to handle heavy crude by 2017 at the 155,000 barrel per day plant, Reuters reported.
Husky did not disclose an estimated cost for such a project at the Lima Refinery, Reuters said.
Houston engineering and construction firm KBR recently announced that it had secured a contract to do a revamp job on a Midwest light-sweet crude refinery (which Lima is), but Duvall declined to say KBR was the firm on Husky’s potential project.
Husky is nearing completion of its Sunrise Energy Project, making more heavy crude available for refining. Located northeast of Fort McMurray, Alberta, Sunrise is considered a world-class reservoir with estimated reserves of 3.7 billion barrels of bitumen. The project is about 70 percent complete with first production planned for 2014, the company said in its last earnings report in late July.
Other energy companies have recently revamped facilities or partnered with other companies to process heavy crude. Husky already has a partnership with BP in Toledo. BP operates the jointly owned 135,000 barrels per day refinery. The plant is undergoing work so it can handle the oil coming from Sunrise and process it into various transportation fuels, the company has confirmed.
Previous Lima Refinery owner Valero Energy Corp. had plans to partner with EnCana Corp. to process heavy crude oil supplied by EnCana. However, in 2005, Valero announced the plan would not happen, and that the $2 billion cost had made the needed conversion too expensive.
In 2007, Valero sold the refinery for $1.9 billion to Husky.