Husky Energy is increasing its exposure to higher value oil products with the US$435-million acquisition of the Superior Refinery in Superior, Wisconsin.
The 50,000 bbl/d facility, owned by Calumet Specialty Products Partners, is capable of processing heavy, medium and light grades from Canada and the Bakken.
It currently produces approximately 9,000 bbls/day of asphalt, 17,500 bbls/day of gasoline and 10,900 bbls/day of diesel, as well as heavy fuel oils. The transaction includes the acquisition of the refinery’s associated logistics, including two asphalt terminals, 3.6 million barrels of crude and product storage and a fuels and asphalt marketing business.
Husky says the all-cash purchase accelerates its strategy to “capture full value” from its growing heavy oil production in Western Canada.
It also accelerates the company’s asphalt strategy, adding immediate production and providing additional capacity once in-flight projects are completed in 2018. As a result, Husky says it is deferring a proposed expansion to its asphalt refinery at Lloydminster, Alberta. During the second quarter Husky had continued early stage work on the project, expecting a final investment decision in2018.
The Superior Refinery purchase will boost Husky’s presence in the US Midwest refining market. It also owns the 160,000 bbl/d Lima Refinery in Lima, Ohio, as well as 50 percent interest in BP’s Toledo Refinery in Toledo, Ohio. Its partnership with BP also the latter company holding 50 percent interest in Husky’s 60,000 Sunrise SAGD project in the oilsands.
The Superior Refinery is connected to the Enbridge Mainline, giving it direct access to Husky crude.
Husky says it plans to retain the approximately 180 workers at the facility.