CALGARY, May 26 /PRNewswire-FirstCall/ -- (TSX - COS.UN) - Canadian Oil Sands Trust ("Canadian Oil Sands" or the "Trust") today announced that, based on investigations to date, Syncrude believes to have identified the root causes of the odorous emissions that were released following the startup of the Stage 3 expansion. Modifications required to rectify the problem are expected to take about one to two months to implement and the associated capital costs are anticipated to be modest. The timeline for the repairs and expected costs are preliminary and subject to change. Syncrude also requires the approval of Alberta Environment on the proposed solution prior to resumption of Stage 3 operations.
The odorous emissions are believed to be associated with the start-up of the flue gas desulphurizer ("FGD"). The FGD is a new environmental unit installed on Coker 8-3 designed to significantly reduce sulphur dioxide emissions from the coker and it is the first time Syncrude has employed such technology in its operations.
"Syncrude is working around the clock with FGD technology experts to engineer a solution that alleviates the odour issues experienced by the local communities, which has been a great concern to Syncrude," said Canadian Oil Sands President and CEO, Marcel Coutu. "We anticipated that the start-up of a massive expansion such as Stage 3 might be a bumpy process, and that does not detract from the long-term value of the expansion. Coker 8-3 was approaching design capacity rates following its early May start-up, and once we complete our FGD modifications, we expect to resume Stage 3 operations. The smooth operation of the FGD, together with the other Stage 3 units, should dramatically improve environmental performance from the plant, supporting Syncrude's future sustainable growth."
To reflect the lost production from the delay in Stage 3 operations, Canadian Oil Sands Trust has revised its outlook for annual Syncrude production to range from 90 to 100 million barrels with a single point estimate of 95 million barrels. The estimate for second quarter Syncrude production has correspondingly been lowered to total approximately 22 million barrels from 24 million barrels. The Trust plans to issue new guidance on funds from operations and other estimates early next week to reflect the revised production outlook. This guidance document will be posted on the Trust's website at http://www.cos-trust.com/investor/guidance.aspx.
As the current plans for the modifications and the resumption of Stage 3 operations are preliminary and still require various approvals, including those from Alberta Environment, the information provided is subject to change or modification. The Trust will provide updates when they become available.
Canadian Oil Sands Trust is an open-ended investment trust that generates income from its indirect 35.49 per cent working interest in the Syncrude Joint Venture. The Trust has approximately 464 million units outstanding, which trade on the Toronto Stock Exchange under the symbol COS.UN. The Trust is managed by Canadian Oil Sands Limited.
Advisory: In the interest of providing Canadian Oil Sands Trust ("Canadian Oil Sands", "COS" or the "Trust") unitholders and potential investors with information regarding the Trust, including management's assessment of the Trust's future plans and operations, certain statements throughout this press release contain "forward-looking statements". Forward-looking statements in this release include, but are not limited to, statements with respect to: the anticipated impact and duration of the shutdown of Coker 8-3, any potential impact relating to the production and costs for the quarter and the year, and the future environmental performance once Stage 3 is up and running.
You are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. Although the Trust believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking statements contained in this press release include, but are not limited to: the difficulties and risks involved in starting up new equipment and the technology such as the flue gas desulphurization unit, and the additional risks and complexity of integrating a large project such as UE-1 into existing upgrading operations; government regulations and the nature of discretionary orders; and such other risks and uncertainties described from time to time in the reports and filings made with securities regulatory authorities by the Trust. We would refer you to the risks and assumptions further outlined in the Trust's annual information form and annual and quarterly financial reports.
Canadian Oil Sands Limited
Marcel Coutu
President & Chief Executive Officer
Units Listed - Symbol: COS.UN
Toronto Stock Exchange
