Husky

On October 25, a major consolidation of two Canadian oil and gas companies was announced with the planned merger of Cenovus Energy and Husky Energy. The prospective consolidation will offer the opportunity for corporate-level synergies and, over the longer term, for the physical integration of some of the companies’ operations, especially in Alberta’s oil sands. In today’s blog, we discuss some of the more nuanced elements of the consolidation, including potential improvement in crude oil market access and the larger presence of the combined company in PADD 2 refining, a sector that has taken a major hit during the pandemic. This blog also introduces a new weekly report from RBN and Baker & O’Brien: U.S. Refinery Billboard.

On October 25, a major consolidation of two Canadian oil and gas companies was announced with the planned merger of Cenovus Energy and Husky Energy. The prospective consolidation will offer the opportunity for corporate-level synergies and, over the longer term, for the physical integration of some of the companies’ operations, especially in Alberta’s oil sands. In today’s blog, we discuss some of the more nuanced elements of the consolidation, including potential improvement in crude oil market access and the larger presence of the combined company in PADD 2 refining, a sector that has taken a major hit during the pandemic. This blog also introduces a new weekly report from RBN and Baker & O’Brien: U.S. Refinery Billboard.

Most of the heavy crude oil arriving at the busy Hardisty hub in Alberta that throughputs up to 3.5 MMb/d – is already blended with diluent supplied closer to the production fields to the north. The diluent supply infrastructure to the oil sands today and planned for future expansion is primarily directed from Edmonton. But Hardisty fills an important role in final blending before the crude oil cocktail is transported to market. Today we round up our survey of Hardisty diluent requirements.

Hardisty is the largest oil storage hub in Canada with over 21 MMBbl of tank capacity owned by seven companies. The largest player Enbridge has more than 12 MMBbl of storage with the majority being leased to third parties including a sizeable chunk to investment bankers JP Morgan. Western Canadian Select (WCS) the benchmark Canadian heavy crude is blended at Husky’s Hardisty terminal. Today we detail these two companies’ operations at Hardisty.