The Husky Lloydminster Upgrader, in Lloydminster, Saskatchewan, converts heavy oil to a high-quality, low sulphur synthetic oil. It is a key link between Husky's heavy oil assets and conventional oil markets.
The upgrading margin provides a natural hedge for heavy/light oil market price differentials. In addition, the Upgrader's strategic location and integration with other Downstream assets provides Husky with a seamless asset value-added chain. The Upgrader is a high-performing asset consistently ranked in the first quartile for margin improvement and cost efficiencies.
Heavy oil from deposits in northeastern Alberta and western Saskatchewan and bitumen from Husky's Tucker heavy oil thermal project provide feedstock for the Upgrader. The heavy oil and bitumen are mixed with lighter hydrocarbons (condensate or naphtha) so it moves more easily through Husky and third-party pipelines to the Upgrader. The synthetic crude oil produced is used in the production of gasoline and diesel fuels in conventional refineries in Canada and the United States.
The high-value diesel fuel produced at the Upgrader is sold into the wholesale and retail markets. The upgrading process produces two marketable by-products: sulphur and petroleum coke. Sulphur is sold in Canada and the U.S. to customers in the fertilizer and chemical industries, and is primarily used for manufacturing industrial sulphuric acid. Petroleum coke, used to fuel boilers or cement kilns, is sold to customers in North America and offshore. A portion of the petroleum coke is sold into the calcining market for use in the aluminum industry.