Canadian Mining Journal

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OIL SANDS EXPANSION NEWS Delays, New Cost for Syncrude Stage 3

FORT McMURRAY, Alberta SYNCRUDE LIMITED has been forced to revise the schedule and estimated capital cost for the...



FORT McMURRAY, Alberta SYNCRUDE LIMITED has been forced to revise the schedule and estimated capital cost for the Stage 3 expansion of its operation. Rather than mid-2005, the company has told its investors, construction will not be complete before early-2006. That delays production until mid-2006. With delays in construction come escalating costs. The estimated capital costs are now $7.8 billion, rather than $5.7 billion.

Syncrude says the largest capital cost increases stem from the long engineering phase at the beginning of the project and from underestimating the cost of revamping existing facilities and tie-ins, which together have overshadowed the relatively stronger productivity of the green field components of the construction.

Stage 3 expenditures to date total $4.7 billion, which include the completion of the Aurora 2 mining train and about 37% completion of construction for the upgrader expansion (UE-1), with the purchase of materials, modules and equipment over 90% complete. Details of the expansion are available at www.syncrude.com, in the section called "Our Growth".


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