Husky Midstream Limited Partnership: Company Profile

Background

Overview

Husky Midstream Limited Partnership (HMLP) is a Canadian midstream oil and gas company operating primarily in the Lloydminster region of Alberta and Saskatchewan. Established in 2016, HMLP focuses on the transportation and storage of heavy crude oil, playing a pivotal role in the Canadian energy infrastructure.

Mission and Vision

HMLP's mission is to provide reliable and efficient midstream services, facilitating the safe and timely transportation and storage of crude oil. The company's vision is to be a leading midstream service provider, supporting the growth and development of the Canadian oil and gas industry.

Primary Area of Focus

The company's primary focus is on the transportation and storage of heavy crude oil, particularly Western Canadian Select (WCS), the benchmark for heavy Canadian crude oil. HMLP operates an extensive network of pipelines and storage facilities, ensuring the efficient movement and storage of crude oil from production sites to refining and export destinations.

Industry Significance

HMLP plays a critical role in the Canadian oil and gas sector by providing essential midstream services that connect upstream production with downstream refining and export facilities. Its operations are integral to maintaining the flow of heavy crude oil, which is vital for both domestic consumption and international export markets.

Key Strategic Focus

Core Objectives

• Operational Excellence: Ensure the safe, reliable, and efficient operation of pipeline and storage facilities.

• Infrastructure Expansion: Invest in and develop infrastructure to support the growing demand for heavy crude oil transportation and storage.

• Customer Satisfaction: Provide high-quality services that meet the needs of producers, refiners, and other stakeholders.

Specific Areas of Specialization

• Crude Oil Transportation: Managing an extensive pipeline network for the movement of heavy crude oil.

• Storage Solutions: Operating storage terminals with significant capacity to accommodate varying volumes of crude oil.

• Blending Services: Responsible for blending Western Canadian Select, ensuring consistency and quality of the crude oil blend.

Key Technologies Utilized

• Pipeline Monitoring Systems: Advanced technologies for real-time monitoring of pipeline integrity and flow rates.

• Storage Management Software: Sophisticated systems for managing storage capacities and inventory levels.

• Blending Technology: State-of-the-art equipment for the precise blending of crude oil to meet market specifications.

Primary Markets or Conditions Targeted

• Domestic Refining: Supplying crude oil to Canadian refineries.

• Export Markets: Facilitating the export of heavy crude oil to international markets.

• Upstream Producers: Providing transportation and storage solutions for oil sands and heavy oil producers.

Financials and Funding

Funding History

In 2016, Husky Energy sold a 65% interest in its midstream assets to Cheung Kong Infrastructure Holdings Limited and Power Assets Holdings Limited for $1.7 billion CAD. Husky Energy retained a 35% interest and continued as the operator of the assets.

Total Funds Raised

The transaction raised $1.7 billion CAD in cash proceeds, which were used to strengthen Husky Energy's balance sheet.

Notable Investors

• Cheung Kong Infrastructure Holdings Limited (CKI): Holds a 16.25% interest in the partnership.

• Power Assets Holdings Limited (PAH): Holds a 48.75% interest in the partnership.

• Cenovus Energy Inc.: Holds a 35% interest and serves as the operator.

Intended Utilization of Capital

The capital raised was intended to strengthen Husky Energy's balance sheet and support the expansion of its heavy oil thermal business, including investments in new infrastructure to expand takeaway capacity for additional Lloyd thermal projects.

Pipeline Development

Key Pipeline Candidates

• Lloydminster Region Pipelines: Approximately 1,900 kilometers of pipeline in the Lloydminster region.

• Hardisty and Lloydminster Storage Terminals: Storage capacity of 5.9 million barrels at Hardisty, Alberta, and Lloydminster, Alberta.

Stages of Development

• Operational: The pipelines and storage facilities are fully operational, serving multiple customers.

Target Conditions

• Heavy Crude Oil: Specifically designed for the transportation and storage of heavy crude oil, including Western Canadian Select.

Relevant Timelines for Anticipated Milestones

• Expansion Projects: Ongoing investments in infrastructure to support the growing demand for heavy crude oil transportation and storage.

Technological Platform and Innovation

Proprietary Technologies

• Pipeline Integrity Management Systems: Proprietary systems for monitoring and maintaining pipeline integrity.

• Advanced Blending Facilities: State-of-the-art facilities for the precise blending of crude oil to meet market specifications.

Significant Scientific Methods

• Real-Time Data Analytics: Utilizing data analytics for predictive maintenance and operational optimization.

• Automated Control Systems: Implementing automated systems for efficient pipeline and storage operations.

Leadership Team

Key Executive Profiles

• Cenovus Energy Inc.: As the operator, Cenovus Energy's leadership oversees the operations of Husky Midstream Limited Partnership.

Competitor Profile

Market Insights and Dynamics

• Market Size and Growth Potential: The Canadian midstream sector is integral to the oil and gas industry, with significant investments in infrastructure to support production and export needs.

• Industry Trends: There is a growing emphasis on pipeline safety, environmental sustainability, and the development of infrastructure to support oil sands production.

Competitor Analysis

• Enbridge Inc.: A major competitor with an extensive pipeline network across North America.

• Pembina Pipeline Corporation: Operates a significant pipeline system in Western Canada.

• TransCanada Corporation (now TC Energy): Owns and operates a vast network of pipelines and storage facilities.

Strategic Collaborations and Partnerships

• Cenovus Energy Inc.: As the operator, Cenovus Energy collaborates with HMLP to ensure efficient operations.

• Cheung Kong Infrastructure Holdings Limited and Power Assets Holdings Limited: As investors, they provide capital and strategic direction.

Operational Insights

• Strategic Considerations: HMLP focuses on maintaining high operational standards, ensuring pipeline integrity, and meeting customer demands.

• Competitive Advantages: Ownership of significant pipeline infrastructure and storage capacity in key oil-producing regions.

Strategic Opportunities and Future Directions

Strategic Roadmap

• Infrastructure Expansion: Investing in new pipelines and storage facilities to support increased production and export capacity.

• Technological Advancements: Implementing advanced monitoring and control systems to enhance operational efficiency.

Future Business Directions

• Diversification: Exploring opportunities in other midstream services, such as natural gas transportation and storage.

• Sustainability Initiatives: Implementing environmentally sustainable practices in operations.

Opportunities for Expansion

• Geographic Expansion: Extending pipeline networks to new oil sands projects and export terminals.

• Service Diversification: Offering additional services such as crude oil marketing and blending.

Current Strengths Positioning the Company

• Established Infrastructure: A robust network of pipelines and storage facilities.

• Experienced Management: Leadership with extensive experience in midstream operations.

Contact Information

• Official Website: huskymidstream.com

• LinkedIn Profile: ca.linkedin.com/company/husky-midstream