Update 2 – Husky (Lima Coker Exp), BP (Toldeo Coker Exp) form oil sands (Sunrise) JV like COP_EnCana

[Charles RandallParticipant]

Update 2 – Husky, BP form oil sands joint venture
 
Dec. 5, 2007 CALGARY, Alberta (Reuters) – Husky Energy Inc and BP Plc said on Wednesday they are forming an alliance to link Husky’s Sunrise oil sands project in Alberta with a BP refinery in Ohio, the latest in a series of deals matching Canadian oil production with U.S. processing.
The companies plan investments in the assets of at least $5.5 billion. Under the transaction, Husky, the Canadian oil firm controlled by Hong Kong billionaire Li Ka-shing, and British oil major BP, will have 50 percent each of BP’s 155,000 barrel-a-day Toledo refinery, the firms said.
The plant will be retooled to process 120,000 barrels a day of extra-heavy bitumen from the Alberta oil sands and total capacity will be increased to 170,000 barrels a day. The work is expected to cost $2.5 billion.
The companies will also share ownership of Sunrise, a development near Fort McMurray, Alberta, which is expected to produce 200,000 barrels a day of oil sands-derived crude by 2015-2020, starting with a 60,000 barrel a day phase in 2012, they said.
Joint investment up to the initial phase is estimated at $3 billion, said Husky, which recently acquired a 160,000 barrel a day refinery in Lima, Ohio, from Valero Energy Corp.
It is also planning to convert that one to run heavy crude feedstock. The latest transaction is similar to an oil sands-refining venture hammered out by EnCana Corp and ConocoPhillips last year.
Husky said the deal with BP has prompted it to postpone again the planned expansion of its heavy oil upgrading plant in Lloydminster on the Alberta-Saskatchewan border. The transaction is expected to close in the first quarter of 2008, the companies said.
(Reporting by Jeffrey Jones; Editing by Peter Galloway)

[Charles RandallParticipant]

Here is an update on the Husky & BP JV that is clone of the COP & EnCana JV around Canadian Oil Sands & US Refinery asset utilization. <See earlier news around both Husky purchase of Lima & the COP-EnCana JV>
 
Husky recently purchased the 160 MBD Lima Refinery from Valero & plans to expand Heavy Canadian Crude use there (Coker Expansion expected not yet announced) and this JV with BP will do an expansion at Toledo (Coker expansion or increased utilization) to increase total capacity to 170 MBD & Heavy Canadian to 100 MBD. The Husky Sunrise Oil sands project will supply Upgraded Bitumen crude (60MBD in 2012 growing 200MBD by 2015).  Investment cost & assets will be split 50-50.
 
One downsides appear to be that the Expansion Llyodminster project will again be postponed until the deal closes in 2008 1Q.
Regards

[Charles RandallParticipant]

See Coking.com Coker News posting update 2/6/07 on approval Husky – BP Toledo JV.
 
The news item says that Husky Lima expansion will use Conventional Heavy crude instead of Bitumen crude from Sunrise (not sure how dinky 2 drum Lima anode coker could handle more heavy bottoms than today’s case)
 
Also mentions that Husky Llyodminster upgrade coker expansion will now be deferred but kept as future potential Guess had use funds $3MM for the BP JV – but would think the Llyodminster plans increase asphalt unit by 25MBD would go ahead  – using Tuker upgrader output.
 
Regards

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