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".