Lloydminster– On March 1 Husky Energy hosted an open house for its proposed asphalt refinery adjacent to the Lloydminster upgrader and ethanol plant.
The proposal, if it goes ahead, would add a second 30,000 bpd asphalt refinery to the Border City. The original was built in 1947 on the city’s northwest corner, on the Alberta side of the border.
The proposed asphalt refinery is expected to process 30,000 bpd of heavy crude, producing 15,000 bpd of various grades of asphalt, as well as intermediate products and condensate.
The company said it will use best-in-class expertise in addition to their 70 years of asphalt refining experience in the Lloydminster area. The location, adjacent to the Husky Lloydminster Upgrader Complex, will allow the new facility to be integrated with current operations. The site is on the south side of the existing upgrader.
A pipeline will transport crude from Husky’s existing gathering system to tanks located at the north end of the upgrader complex. Crude will be processed using atmospheric and vacuum distillation to produce asphalt and intermediate products, such as gas oils and condensate.
The refined product will be stored on site in tanks and will be loaded onto rail cars for shipping. Condensate will be reused as diluent in transporting Husky’s heavy oil production.
Raw water, steam, natural gas and power will be sourced through the existing upgrader complex supply. Collection of on-site storm water will reduce raw water usage.
Wastewater will be treated prior to on-site disposal through injection into the Dina formation, the typical formation used for produced water disposal.
Almost all sulphur will be captured in the final asphalt and intermediate products, minimizing sulphur dioxide emissions. Heaters will use low NOx burners. Less natural gas will be combusted, generating less nitrogen oxides, greenhouse gases and fine particulate matter. This will be accomplished through use of internally produced gases being reused as fuel and drawing on the steam supply from an existing steam generation source.
There will be a vapour recovery system for the asphalt loading system and tanks.
Leak detection and a repair program is intended to minimize emission of volatile organic compounds.
The construction area is limited to the existing upgrader complex. The majority of the construction workforce will be coming from Lloydminster, and buses will be provided to minimize traffic.
The project will see a workforce peaking at approximately 800 people. Once complete, it will result in 50 full-time jobs in operations. The economic spinoffs include increased business for local businesses and increased tax revenue for municipal and provincial governments.
Husky has not yet released a dollar value for the project, nor has it been approved for construction yet or a timeframe been given. According to the Ministry of Environment, as of mid-March the company had not yet submitted for an environmental permit.
The Saskatchewan provincial budget of March 22 included a refence to a new oil processing royalty incentive which will be worth up to $75 million per approved project. (See related story Page A2).
In the company’s Feb. 24 conference call discussing its 2016 year-end, CEO Rob Peabody said, “In regard to upcoming turnarounds, work is scheduled at both the Lloyd upgrader and the asphalt plant in the second quarter of this year. The upgrader is set for a seven-week maintenance program, while the asphalt plant will undergo a four-week turnaround.”
Thermal expansion continues
The refinery development appears to go hand-in-hand with the company’s growth in thermal heavy oil production. Peabody noted, “The final significant initiative for the year was to build out a deep inventory of projects in which to invest in the future. In the heavy oil segment alone, we’ve identified 18 new Lloyd thermal projects that together represent more than 150,000 barrels per day of potential development.”
He added, “We sanctioned 30,000 barrels per day worth of new Lloyd thermals at Dee Valley, Spruce Lake North and Spruce Lake Central. We expect to see first oil from all three projects in 2020. This is in addition to the 10,000 barrels per day now under construction at Rush Lake 2, with production on track for the first half of 2019.”
Rush Lake 2 is east of Maidstone, Dee Valley is just north of Maidstone, and the two Spruce Lake projects are southeast of St. Walburg.
