By August 14, 2017 Read More →

Husky Energy buying Wisconsin refinery for $435 million

Husky Energy

Husky Energy is purchasing the Superior Refinery for US$435 million in cash. Positively Superior photo.

Husky Energy buying 50,000 b/d Superior, Wisconsin refinery

On Monday, Calgary-based Husky Energy announced it will purchase a 50,000 barrel per day (b/d) refinery from Calumet Specialty Products Partners, L.P., located in Superior, Wisconsin.

The purchase price for the Superior Refinery is US$435 million in cash.  According to the company, the facility will help accelerate Husky’s strategy to capture full value from its heavy oil production in Western Canada.

“Acquiring the Superior Refinery will increase Husky’s downstream crude processing capacity, keeping value-added processing in lockstep with our growing production,” said CEO Rob Peabody.

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With the addition of the Superior Refinery, Husky’s total downstream capacity will be about 395,000 b/d.

The refinery, which can process Canadian heavy, or medium and light grades from Canada and the Bakken, is connected to Husky’s pipeline terminal in Hardisty, Alberta, via the Enbridge Mainline pipeline.

The Superior Refinery will boost the company’s market access to the US and will increase the total US refining capacity to 275,000 b/d.  As well, it will expand Husky’s storage assets in Superior.

“Upon closing, this new asset will immediately contribute to increased earnings and funds from operations,” said Peabody.

With the purchase of the refinery, Husky Energy is hoping to cash in on an expected increase in infrastructure spending across North America.  At 9,000 barrels per day of asphalt, the Superior Refinery will add immediate asphalt production and will provide additional capacity once in-flight projects are completed in 2018.

Husky says its plans to expand asphalt production in Lloydminster will be deferred to after 2020 and will be considered again as heavy oil production grows.

The company says the refinery comes with an established customer base as well as an “experienced and capable operations team”, and it plans to keep the approximately 180 workers currently employed at the refinery on the job.

The deal is subject to regulatory approval and is expected to close in the fourth quarter of 2017.

 

 

Posted in: Canada

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