Syncrude project partners revise cost, schedule for Stage 3 expansion

By OGJ editors
HOUSTON, Mar. 10 -- Joint venture partners in the Syncrude oil sands mining operation in Fort McMurray, Alta., operated by Syncrude Canada Ltd., have reported a delay in the construction schedule of the project's Stage 3 expansion as well as a significant increase in the expansion's capital cost estimates.

Canadian Oil Sands Ltd., the largest stakeholder in the project, said, "The best current estimate from Syncrude is that the project will reach mechanical completion in early 2006, rather than mid-2005, and be in service by mid-2006." The extended completion date is expected to increase total capital costs to about $7.8 billion (Can.) compared with the $5.7 billion estimate made in September 2002.

Marcel Coutu, Canadian Oil Sands president and CEO, commented, "Canadian Oil Sands is extremely disappointed in the extended completion outlook provided by Syncrude and surprised by the magnitude of the capital cost increase for the Stage 3 project. Significant reorganization and forward plans are being implemented as a result of this new information.

"It is only fortuitous that this setback is occurring during a period of robust crude oil prices, which may prevail for some time and should help Canadian Oil Sands continue to fund much of its share of this project from cash flow," Coutu said.

Over the past few months, Syncrude reported it has been assisted by numerous independent experts and from the project management ranks of Syncrude's owners in reassessing the status of Stage 3. "Many of these project management specialists now will be introduced into a newly reorganized project management structure to oversee the completion of Stage 3," it said.

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

To date, Stage 3 expenditures total about $4.7 billion, which include the completion of the Aurora 2 mining train and about 37% completion of construction for the upgrader expansion, with the purchase of materials, modules, and equipment more than 90% complete.

Syncrude's Stage 3 expansion includes the development of the Aurora 2 mine and the addition of a third, 100,000 b/d fluid coker. Stage 3 also includes facilities to improve the quality of Syncrude's total site production, which will be increased to about 350,000 b/d on project completion.

Syncrude Project partners are Syncrude Canada Ltd., Imperial Oil Resources, Canadian Oil Sands LP, Canadian Oil Sands Ltd., ConocoPhillips Oilsands Partnership II, Mocal Energy Ltd., Murphy Oil Company Ltd., Nexen Inc., and Petro-Canada Oil & Gas.

Related Articles

ConocoPhillips slashes 2015 capital budget

12/08/2014 ConocoPhillips has elected to reduce its 2015 capital budget to $13.5 billion, down 20% compared with this year’s budget. The news comes on the hee...

BLM issues final SEIS for Greater Mooses Tooth project in NPR-A

10/30/2014 The US Bureau of Land Management released its final supplemental environmental impact statement for the proposed Greater Mooses Tooth (GMT1) oil an...

Western gulf lease sale attracts $110 million in high bids

08/20/2014 Gulf of Mexico western planning area Lease Sale 238 drew 93 bids from 14 companies over 81 blocks covering 433,823 acres, totaling $109,951,644 in ...

ConocoPhillips, Enap sign deal to study unconventional oil, gas in Chile

08/06/2014 ConocoPhillips and Chile’s state oil company Empresa Nacional del Petroleo (Enap) have signed a technical agreement to jointly conduct geological, ...

Oando completes purchase of Nigeria assets from ConocoPhillips

07/30/2014 Oando Energy Resources (OER), a Calgary-based subsidiary of Oando PLC, has completed its acquisition of the Nigeria upstream business of ConocoPhil...

ConocoPhillips, Suncor join Shell in deepwater exploration off Nova Scotia

06/11/2014

ConocoPhillips and Suncor Energy Inc. are joining Shell Canada as partners in exploring the deepwater Shelburne basin off Nova Scotia.

ConocoPhillips raises estimates on Eagle Ford recoverable resources, production

04/11/2014 ConocoPhillips has increased its estimated resource base in the Eagle Ford play to 2.5 billion bbl of oil in place from 1.8 billion bbl, as well as...

ConocoPhillips reports higher 2013 earnings

02/10/2014 ConocoPhillips reported full-year earnings of $9.2 billion in 2013, an increase from the $8.4 billion totaled in 2012, which included $1.2 billion ...

ConocoPhillips reports higher 2013 earnings, expects higher production in 2014

01/31/2014 ConocoPhillips reported full-year earnings of $9.2 billion in 2013, an increase from the $8.4 billion totaled in 2012, which included $1.2 billion ...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected