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* $300 mln project to process 40,000 bpd
* Complete by 2017, report says
* Husky says design work under way, project not yet approved
CALGARY, Alberta, Sept 10 (Reuters) - Husky Energy Inc , Canada's No. 3 integrated oil company, will proceed with a $300 million plan that will let its 160,000 barrel per day Lima, Ohio, refinery process up to 40,000 bpd of Canadian heavy crude by 2017, according to a media report on Tuesday.
The Lima News said on its website that Husky officials confirmed in a meeting with the paper and local officials that they would go ahead with the plan.
However, Mel Duvall, a spokesman for the company, said in an email that the company is still doing early work on the revamp and has not yet approved the project.
"We are moving forward with preliminary engineering design at the Lima refinery on a proposed project," Duvall wrote. "The project has not yet been sanctioned. That decision will be made once the engineering study is completed and evaluated."
The newspaper said construction will begin next year, but that most of the work will be completed during maintenance turnarounds scheduled for the fall of 2015 and 2016.
The company first said it was considering the project last month.