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Husky's Ohio Refinery Could Process More Heavy Crude From Canada

In a strategy aimed at flexibility and better meeting market demands, Alberta-based Husky Energy Inc. plans to make a $300 million investment in upgrades at its Lima Refinery in northwest Ohio that would enable it to process heavy crude oil from Western Canada.

Although the full plan has not yet been approved by its board, the company has set aside $50 million for preliminary engineering next year, when construction could also start. If the plan goes forward, upgrades at the refinery could be complete by 2017.

"We are advancing a plan to increase our ability to process heavier feedstocks at the refinery," said COO Robert Peabody during a conference call with financial analysts this month to discuss the company's 2014 capital expenditure budget. "The proposed upgrades will allow us to run up to 40,000 b/d of heavy crude, which will further strengthen our integration capabilities as we bring on more heavy oil thermal projects in Western Canada."

Husky's Lima refinery produces gasoline, diesel, jet fuel, residual fuels and petrochemical feedstocks. The refinery produces two billion gallons of refined petroleum products annually, including 25% of the gasoline consumed in Ohio. This year, Husky installed a new 20,000 b/d kerosene hydrotreater at the facility, which helped it produce more distillate and gave it greater flexibility to switch between diesel and jet fuel production.

An integrated energy company, Husky has upstream, midstream and downstream operations across the globe. It also has a 50% ownership stake in the BP-operated refinery in Toledo, OH. The company plans to spend $4.8 billion on its operations next year, which it hopes will include the upgrades at its Lima facility.

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