MOOSE JAW — After purchasing Husky Energy Inc. in 2021 for nearly $24 billion, Cenovus Energy Inc. is now cleaning up the former’s oil-related sites, including in Moose Jaw.
Husky used to operate a bulk fuel depot on Ninth Avenue Northeast just north of the railroad tracks but shut it down years ago. Around the beginning of June, contractors with Cenovus moved on site and began excavation work as part of a planned soil remediation program.
A company spokesperson said in an email that this work is part of the Calgary-based oil and natural gas producer’s efforts to remediate locations that the company is no longer using. The spokesperson did not provide any other information about the initiative.
KBL Environmental, which is assisting Cenovus, did not respond to requests for comment.
According to an article on Â鶹ÊÓƵ.com, Husky began in Lloydminster, Alta., in 1946 after it relocated a shut-down refinery from Riverton, Wyo. According to the Heavy Oil Science Centre webpage, “Husky’s move into Lloydminster spurred a sudden upsurge in the drilling activity here, which in turn boosted production and dramatically increased the need for a refinery.”
Husky became the dominant player in the northwest Saskatchewan oilpatch and the largest producer in Saskatchewan for decades.
That initial refinery was replaced in the early 1980s. “On May 10, 1983, a new, fully modern refinery went on stream with a capacity of 25,000 barrels per day,” according to the Heavy Oil Science Centre.
The 1980s development of the Bi-Provincial Upgrader spurred both major political controversy and furthered the development of the Saskatchewan oilpatch for decades to come.
Beyond the fiscal return of the initial upgrader investment, Saskatchewan’s oilpatch gained greatly from its construction. The upgrader’s presence allowed Husky to drive most of the oil development in northwest Saskatchewan in the intervening three decades, with billions of dollars invested.
Over the last decade, Husky focused on developing cookie-cutter thermal projects east of the Alberta border and north of the North Saskatchewan River, with a dozen now producing.
Except for the earliest projects, each steam-assisted gravity drainage project produced 10,000 barrels per day and cost $250 million to $300 million.
Cenovus recently exited Saskatchewan, with its $940 million sale of its controlling interest in the Weyburn Unit to Whitecap Resources in 2017. Its acquisition of Husky marks Cenovus’ return to Saskatchewan in the biggest way possible, buying the province’s historically largest producer.
In 2009, Cenovus was spun out of EnCana, with Cenovus taking over the major oil plays, including the Weyburn Unit, and Encana focusing on natural gas. EnCana had previously been PanCanadian until 2002. PanCanadian’s roots, as a division of Canadian Pacific Railways, went back to the 1880s, after the discovery of natural gas near Medicine Hat.
In 1954, the discovery of the Weyburn field was drilled near Ralph by Central Leduc Oils Ltd., a company that became Central Del Rio Oils Ltd. in 1957 with the merger of Del Rio Oils.
As PanCanadian, then EnCana and Cenovus, the Weyburn Unit pioneered the deployment of carbon dioxide-enhanced oil recovery (CO2-EOR) in Canada, starting in 2000. A few years later, Husky developed its own flavour of CO2-EOR, including producing CO2 at the upgrader. They have three pilot projects for CO2-EOR in place.
As recently as 2017, Husky looked at developing an additional 30,000 barrel per day asphalt refinery at Lloydminster, but shelved those plans. The commissioning of one of its most recent thermal projects, Spruce Lake Central, had been delayed because of the COVID-19 pandemic, but it was later completed and brought online.
The merged company will operate under the Cenovus Energy name and will be headed by Alex Pourbaix, president and CEO. It will produce approximately 750,000 barrels of oil equivalent per day (boepd), with a refining capacity of approximately 660,000 boepd. The combined company is the third-largest Canadian oil and natural gas producer and the second-largest Canadian-based refiner and upgrader.
