A partnership that plans to build an oilsands refinery northeast of Edmonton says the cost of the project has risen $8.5 billion.
North West Redwater Partnership also
said in a news release Wednesday that the startup date for its bitumen
upgrader has been pushed back to September 2017 from mid-2016.
When the project was approved in November 2012, the cost was estimated at $5.7 billion.
The partnership, made up of North
West Upgrading Inc. and Canadian Natural Upgrading Limited, a wholly
owned subsidiary of Canadian Natural Resources Limited (TSX:CNQ), said
the higher cost is "due to a combination of cost inflation and the
inability to fully capture certain cost savings initiatives."
It also says that it believes the merits of the project are still positive.
The refinery is expected to 50,000
barrels per day of raw bitumen supplied by Canadian Natural and the
Alberta Petroleum and Marketing Commission.
"The toll payers believe, that upon
successful completion of the project, this refinery will strengthen
their organizations through providing a competitive return on investment
and by adding 50,000 barrels per day of bitumen conversion capacity in
Alberta which will help improve pricing and reduce pricing volatility on
all Western Canadian heavy crude oil that they produce or are entitled
to market through royalties," the press release said.
"This project will provide a local
market for Alberta oilsands production that is not reliant on export
pipelines, and a low carbon solution that will ensure that the CO2
footprint of the products produced by the refinery will be among the
lowest in the world."