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Rotary briefed on Cenovus plans

By January 12, 2023No Comments
Kerry Margetts, the vice president of Canadian downstream manufacturing and technical services with Cenovus, provided Rotarians with an overview of Lloydminster operations and expansion projects at their Monday meeting. Geoff Lee Meridian Source


Cenovus Energy is making the Lloydminster area the centre of its integrated oil universe with multiple ongoing and planned projects at the Lloydminster Refinery and Upgrader.

Kerry Margetts, the company’s vice president of Canadian manufacturing and downstream technical services, provided an overview of some local projects at the Rotary Club of Lloydminster’s Monday lunch.

He first spoke about an ongoing refinery de-bottlenecking project and a refinery feedstock replacement project.

“We’re talking in the neighbourhood of $100 million for these projects,” said Margetts. 

The de-bottlenecking project, to be completed in late 2023, will increase throughput by 3,000 barrels a day of feedstock crude to produce an additional 1,500 bbls/day of asphalt.

The refinery currently has a capacity of around 29,000 bbls/day.

The project involves upgrading and installing new equipment with another possible expansion that Margetts says Cenovus is still mulling over.

“… but we’re looking very hard at a further expansion that would put an additional expansion of the refinery up to 50,000 bbls/day,” he said.

“That will also allow us to process crude from the Cold Lake area at the refinery and upgrader. We’d like to have options on how we feed our plants, even though it is all our oil.”

Currently, Cenovus can only feed the plants with Lloydminster-produced oil.

The feedstock replacement project has a 2026 completion target and will allow the refinery to produce an additional 7,500 bbls/day of asphalt.

The project will replace the existing rail terminal with two new ones and involve the installation of new equipment.

Margetts also touched on the upgrader feedstock replacement project as a part of the company’s so-called Rewire Alberta initiative.

“We want to bring oil from Alberta to here,” said Margetts, noting the upgrader would be expanded to access heavier crude from Cold Lake and Foster Creek.

“We want to take our higher quality Lloyd barrels and sell them for a greater value into Hardisty and sell them into the market. It’s just a replacement. We’re not reducing production here.”

Margetts says expanding the upgrader in terms of capacity and feedstock will allow them to capture additional diluent to return to the upstream facilities, resulting in less diluent imports from the U.S.

“This would also enable Cenovus to produce more diesel production,” he said.

The upgrader currently has a capacity of 81,000 bbls/day.

Margetts also touched on the company’s role in the Pathways project as one of six major oil sands producers in Canada committed to net-zero emissions by 2050, mainly through an estimated $24 billion carbon capture and sequestration investment using an underground formation in the Cold Lake area.

The Alberta government recently gave its approval to scope the site.

“Now, we have to go and look at the geology to see if the geology is appropriate to be able to sequester the amount of CO2 we want to look at,” said Margetts.

He also spoke to Rotary about the company’s community and Indigenous partnerships and its sponsorship and donations programs in the Lloydminster area in 2022.

Margetts has been in the oil and gas business for more than 37 years and says he has two main priorities in his current role that he assumed in April 2022.

“One is I take care of all of the downstream Canadian assets for Cenovus in terms of the safe operations of those,” he said.

“I also have a technical services team that provides the deeper higher level technical support for both the Canadian and U.S. downstream operations.”