Canadian-based Husky Energy confirmed Tuesday that plans for reconstruction of its Superior, Wisconsin, refinery, extensively damaged in an April 2018 explosion and fire, have been suspended, media reports state.
“Given the current safety and public health risks, Husky has begun a systematic and orderly suspension of major construction activities related to the Superior rebuild project,” Husky spokesperson Kim Guttormson told the press.
Reconstruction was scheduled to begin in September. At present, only terminal operations are conducted at the refinery.
An explosion in a fluid catalytic cracking unit on April 26, 2018, triggered a massive fire at the 38,000 bpd refinery that burned for nearly eight hours and triggered an evacuation of Superior, population 27,000. The emergency left 36 people injured.
Suspension of the rebuilding project comes as the company puts into effect a $1 billion reduction in 2020 spending announced earlier this month. The steep drop in the price of oil was cited regarding those cuts.
A fourth-quarter earnings report issued by Husky states that the estimated cost of the reconstruction project had risen nearly 90% from an original estimate of $400 million. However, Husky linked its decision to delay reconstruction in Superior to the COVID-19 pandemic.
“We know the decision to suspend work on the project has an impact on many people,” Guttormson said. “We made this decision with the sole focus of the health and safety of our workforce, including contractors, their families and everyone living in the community.”
The Superior refinery reconstruction was specifically excluded from major capital reductions announced by Husky Energy on March 12. Those included oil projects in Western Canada, construction related to thermal energy projects and development of an offshore China oil field.
“The Company continues to review further capital adjustments in response to the current market environment,” a Husky Energy press release stated at that time.
Industrial Fire World magazine honored Superior Fire Chief Steve Panger with its 2018 Red Adair Award in recognition of his department’s response to the fire.