Husky Energy lets contract for Ohio refinery upgrade

Lima Refining Co. (LRC), a subsidiary of Husky Energy Inc., has entered an integrated supply contract with a subsidiary of Linde Group as part of a planned upgrade and modernization project at its 160,000-b/d refinery at Lima, Ohio.

Under the integrated supply agreement, New Jersey-based Linde North America will supply hydrogen and steam utilities to the refinery as LRC implements a crude oil feedstock flexibility project at the site, Linde said.

“LRC will use the additional hydrogen to hydrotreat product streams containing sulfur and other components,” said Raghu Menon, Linde’s vice-president of tonnage business development in the Americas.

In addition to investing in upgrades that will increase production capacity and operational flexibility at its two existing hydrogen plants in the region, Linde also will build a steam methane reforming (SMR) hydrogen plant designed to help meet overall regional demand from other refining and petrochemical operators in the regional cluster, Menon said.

While Menon said Linde expects to invest about $100 million overall for related enhancements to its regional hydrogen production operations, a value of the integrated supply contract with LRC was not disclosed.

The new SMR plant, Linde Lima 3, should be on stream during first-quarter 2016 and will be operated with Linde’s other two plants as a single installation having a combined hydrogen production capacity of more than 60 MMcfd, the company said.

As of late July, front-end engineering design on the Lima refinery’s feedstock flexibility project was about 95% complete, according to Husky Energy’s latest quarterly earnings report.

The project, intended to provide LRC the flexibility to process up to 40,000 b/d of Western Canadian heavy crude, will not change the refinery’s overall nameplate capacity, Husky Energy said.

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