OREANDA-NEWS. Husky Energy has sanctioned a new crude oil flexibility project at its refinery in Lima, Ohio, which will allow for the processing of up to 40,000 barrels per day (bbls/day) of heavy crude feedstock from Western Canada starting in 2017.

The estimated cost of the upgrade to the Husky Lima Refinery is approximately USD 300 million and will provide an efficient and cost-effective way to process a greater variety of crudes.

The project will include modifications to the coker and processing units and will maintain the refinery's ability to refine light crude oil. Engineering work is underway and the equipment upgrades are scheduled to take place during planned turnarounds in late 2015 and late 2016.

The project is part of Husky's focused integration strategy and supports the Company's growing heavy oil business in Western Canada, where a strong portfolio of existing and planned projects is expected to increase thermal oil production to 55,000 bbls/day in 2016. It is also aligned with Husky's program to enhance its ability to respond more quickly and efficiently to market conditions by increasing feedstock, product and market access flexibility in its refining segment.

Recent integration strategy initiatives include:
* A new 20,000 bbls/day kerosene hydrotreater brought on line at the Husky Lima Refinery in 2013 to increase distillate capacity and provide greater ability to swing between on-road diesel and jet fuel production;
* A new recycle gas compressor at the partner-operated BP-Husky Refinery in Toledo, Ohio to improve operational integrity and plant performance;
* The addition of two 300,000-barrel tanks at the Hardisty terminal to improve storage capability; and
* Securing additional storage capacity at Patoka, Illinois to maximize access to markets.