It has been announced that Husky Energy has approved Rush Lake 2: a new 10 000 bpd heavy oil thermal development in Saskatchewan, Canada. This announcement comes as the company continues to advance its resilient portfolio of low sustaining capital projects. The company's heavy oil thermal production is expected to reach about 80 000 bpd by the end of 2016, from about 18 000 bpd in 2010.
"Rush Lake 2 is yet another project in a high-return portfolio that is profitable even at today's low oil prices," said CEO, Asim Ghosh. "These developments are key in our transition to a low sustaining cost business. Supported by the Lloydminster thermal value chain, we capture incremental value from production and realise the upgrading and refining margins, further strengthening our resilience."
The Rush Lake 2 thermal project builds on a proven template of heavy oil thermal developments in the Lloydminster region and is anticipated to start up in late 2018. Construction is currently under way at three thermal projects that are scheduled to begin production in 2016 and resources are anticipated to be directed to Rush Lake 2 as that work is completed.
These projects utilise a highly standardised and modular approach to development.
Husky has an unmatched land and infrastructure position in the Lloydminster region and the thermal value chain is designed to extract incremental value from its heavy oil thermal production. The value chain includes the Saskatchewan gathering system, Lloydminster Upgrader and asphalt refinery, oil storage capacity at Hardisty and the Company's strategically located refinery in Lima, Ohio.
At the Lima Refinery, the company is proceeding with the initial stages of a crude oil flexibility project designed to improve reliability at the facility and allow for the processing of up to 40 000 bpd of heavy crude feedstock from Western Canada. The project enables Husky to further balance its upstream production and downstream capabilities. This capital efficient investment, compared to a new build facility, will allow the refinery to swing between light and heavy crude to achieve the best margins. The project is expected to be completed in stages over the next three years.
"The margin-based Downstream business further improves Husky's resiliency in a low oil price environment by mitigating exposure to oil price differentials," said Ghosh.
Edited from press release by Angharad Lock
Read the article online at: https://www.hydrocarbonengineering.com/refining/18112015/husky-energy-approves-new-heavy-oil-thermal-project-1642/