The largest piece of equipment for the Husky Refinery rebuild, a vacuum column, landed in Superior over the weekend.
The structure will be used in the distillation process to separate the heaviest components of crude oil into asphalt and other heavy fuel.
The squat vacuum column measures 22 feet in diameter and 123 feet in length. Constructed in Mississippi, it traveled by barge up the Mississippi and Illinois rivers, across Lake Michigan and Lake Superior. It began its journey Oct. 5 and arrived at Fraser Shipyards in Superior on Sunday, Nov. 22.
“As you can see behind me, we’re starting to reach some real milestones with the (rebuild) project,” refinery plant manager Kollin Schade said during a Monday press conference at the shipyards.
Schade said officials are excited to see some of the big equipment coming in.
The vacuum column is less than half the length of Husky’s new deisobutanizer tower, which rolled through Superior earlier this month. However, the vacuum column carries more heft, weighing in at 180 tons compared to the tower’s assembled weight of 130 tons. Both pieces will replace components damaged in the 2018 refinery fire. They will be stored in South Superior until they are installed.
In October, Cenovus Energy agreed to buy Husky for $2.9 billion. That isn't expected to affect the timetable for the refinery's restart.
“At this point, the merger hasn’t impacted anything whatsoever,” Schade said.
Mechanical completion of the refinery is expected in spring 2022, he said, and it should be fully operational sometime around the third quarter of 2022.
“We’re going to go through this very, very deliberate, very systematic, to ensure all the safety mechanisms and operation is in place from that perspective. So it’s gonna take a long time to get this thing fully up and operational,” Schade said.
Civil work on the rebuild, which included digging down 8 feet in the ground and putting in new foundations, grounding grid and sewer systems, has been completed. By the end of the year, Schade said, everything should be at grade level. That sets the stage for erecting the structural steel, which many of the pipes and vessels will rest on.
Additional equipment will continue to roll in, including a fluid catalytic reactor piece coming from Spain.
Construction was halted in March due to the pandemic, but resumed in June with extra precautions in place.
"Actually, it’s going well, slower than the original plan because of COVID ... it's just slowed up the pace a little bit, so I'm pretty pleased with that," Husky CEO Rob Peabody told investors in a call announcing third quarter financial results in October.
Earlier this year, Husky said the cost of the rebuild had grown from $400 million to $750 million, but property damage insurance is expected to "substantially" cover those costs.
Husky has collected over $300 million in business interruption insurance so far and just under $200 million in property damage insurance, Jeff Hart, Husky's chief financial officer, said during last month's call.
"We do expect that as activity levels really start to ramp up on site ... to start to see insurance recoveries come in," Hart said.
Once rebuilt, the refinery will have a similar throughput as its predecessor — 45,000 barrels per day. It will, however, be able to produce an additional 5,000 barrels per day of heavy oil, or about 25,000 barrels per day.
The 2018 explosion and fire at Husky's Superior refinery injured 36 people and led to the evacuation of much of the city, largely fueled by the fear of a potential release of hydrogen fluoride. None of the facility's supply of the toxic gas was found to have escaped.
Despite objections from the community and officials, the refinery will continue to use hydrogen fluoride at the rebuilt refinery with added safety measures.