In 1946, Glenn E. Nielson took a hard look at Lloydminster. By this time, Husky had positioned itself at the forefront of the asphalt industry, even though it remained a relatively small company. When Nielson looked into expanding his company’s operations into Canada, he retained his emphasis on asphalt and heavy oil. Several pools of heavy oil had been developed by a number of companies here, but no one had been able to develop commercial production on a sustained basis.
Nielson figured that if he built a refinery here he might be able to sell bunker fuel for the steam locomotives of the Canadian Pacific and Canadian National railways. His decision was to build a plant "someplace where the two railroads came together". Husky purchased land between the Canadian National and Canadian Pacific rail lines near Lloydminster from the CPR and bought additional acreage and mineral rights on some small leases in the area. Because of the shortage of steel, the building of the refinery remained a problem, but this was solved by dismantling the shut-down Riverton, Wyoming refinery and shipping it to Lloydminster.
The refinery was loaded onto 40 gondola cars and began the journey north in September of 1946. The equipment began arriving in Lloydminster a month later and was stacked in piles out in the open. Harold Holt and Carl Sampson (Sampson Trucking) are two of the local residents who where involved in unloading the cars.
The construction of the refinery began in late 1946 under the direction of supervisor Bill Williams, (who soon became known to people in the community as "Husky" Bill) and Shorty Willard. A photograph survives of the first Christmas party of Husky Oil & Refining Ltd. held in Lloydminster, in 1946. (click here to view photo) It was so cold that winter that construction eventually had to be halted and work resumed in the early spring of 1947. The rebuilt refinery went on stream on July 10, 1947. 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.
Within two years of Husky’s arrival in Lloydminster, oil production reached excessive levels and exceeded the demand made by the limited markets for the viscous crude. The resulting over-supply caused a shortage of storage space, so producers resorted to digging huge open-air pits holding up to 100,000 barrels of crude each. These pits created a problem for the refinery. The oil had to be bought by the pound instead of by volume because it was clogged with dirt, salt, tumbleweeds and jackrabbits. The debris had to be strained out and then the oil had to be remeasured by volume before it could be refined.
In 1958, conversion of the railways in Canada from steam to diesel power had resulted in loss of markets for bunker fuel produced by Husky at Lloydminster.
The Lloydminster Project began in 1963. It was a comprehensive, far-reaching venture designed to expand Husky’s reserves of asphaltic crude, to raise the refinery’s production rate to 12,000 barrels daily, to reduce production costs and to make the overall operation more financially viable through increasing its potential market. The key to the project was the construction of a reversible or "yoyo" pipeline which moved the viscous crude into the marketplace. This was the first reversible pipeline ever used in Canada and the first pipeline of any kind in the immediate vicinity of Lloydminster. The pipeline was completed in 1964.
Demand for asphalt kept increasing over the years with the result that on May 10th, 1983 a new, fully modern refinery went on stream with a capacity of 25,000 barrels per day.