Oilsands project hit by delays, higher costs

CALGARY – Construction of the Long Lake oilsands project is about 90% complete, but labour struggles, including a failure this summer to find enough pipe fitters, has led to a delay of between six months and a year and to a fourth cost bump in two years.

Nexen Inc. and OPTI Canada Inc. now say Long Lake’s first phase will cost as much as $6-billion to build, a 10%-to-15% hike from April when the 50-50 partners revealed an increase to $5.3-billion from $4.6-billion.


The development was expected to cost $3.4-billion and be producing synthetic crude early next year when it was sanctioned in 2004.

OPTI Canada chief executive officer Sid Dykstra said yesterday on a conference call that a 10% increase takes the cost to $5.8-billion, with the remaining range of increase, another potential 5%, factored in as contingency.

Financial Post