Husky Energy may revamp Ohio refinery for some Canadian heavy crude

Wed Aug 7, 2013 4:20pm EDT
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By Kristen Hays

HOUSTON (Reuters) - Husky Energy (HSE.TO: Quote) is considering a revamp of its Lima, Ohio, refinery to process up to 40,000 barrels per day of Canadian heavy crude, a spokesman said on Wednesday.

Canada's No. 3 integrated oil company has sanctioned preliminary engineering design for the project in the third quarter this year that, if approved, would revamp existing process units and add new equipment to handle heavy crude by 2017 at the 155,000 bpd plant.

The refinery now processes light-sweet crude, and it would maintain that capability, spokesman Mel Duvall said.

Several refiners have already conducted similar major conversion projects in recent years at U.S. refineries in the Northern Tier so the plants can process more Canadian heavy crude, which trades at a discount to the U.S. crude benchmark, West Texas Intermediate.

On Wednesday Canadian heavy for September delivery was at a $23 per barrel discount to U.S. crude prices, which closed at $104.37 on the New York Mercantile Exchange on Wednesday.

The latest such project is BP Plc's (BP.L: Quote) $4 billion revamp of its 405,000 bpd refinery in Whiting, Indiana - the largest in the U.S. Midwest. When finished, the plant will be able to process up to 350,000 bpd of Canadian heavy crude - up from 80,000 bpd.

Marathon Petroleum Corp (MPC.N: Quote) spent $2.2 billion on a revamp that added 80,000 bpd of Canadian heavy crude processing capability to its 120,000 bpd Detroit refinery last year.

And Phillips 66 (PSX.N: Quote) in November 2011 finished a $4 billion coker and refinery expansion at its 333,000 bpd joint-venture refinery in Wood River, Illinois that increased heavy crude capacity by up to 110,000 bpd.   Continued...