CALGARY, Sept. 19 /PRNewswire-FirstCall/ -- (TSX - COS.UN) - Canadian Oil Sands Trust ("Canadian Oil Sands") today announced an updated cost estimate for the Syncrude Emission Reduction ("SER") project of approximately $1.6 billion ($590 million net to Canadian Oil Sands based on our 36.74 per cent working interest). Canadian Oil Sands previously disclosed a cost estimate for the SER project of $772 million gross to Syncrude, but indicated that there was upward cost pressure on the project and an update to the cost estimate and timing would be provided once Syncrude had completed a full review of the project. The cost increase reflects a delay in the expected completion date and inflationary pressures. Construction of the project is approximately 14 per cent complete with about $412 million expended to date.
"Syncrude's voluntary effort to reduce sulphur dioxide emissions demonstrates our long-standing commitment to responsible environmental management and protecting the good air quality in the Wood Buffalo region," said Marcel Coutu, Canadian Oil Sands' President and Chief Executive Officer. "While the investment is significantly higher than we had originally anticipated, the SER project will also support the sustainable development of the Syncrude project and its future growth."
When combined with already completed Stage 3 improvements, the SER project is anticipated to reduce stack emissions of sulphur compounds by about 60 per cent from current approved levels. Emissions of particulate matter also should be significantly reduced. The project involves retrofitting sulphur scrubbing technology into the operation of Syncrude's original two cokers. The third coker that was constructed as part of the Stage 3 expansion already incorporated flue gas desulphurization technology that virtually eliminates sulphur dioxide emissions from this unit.
Located near Fort McMurray, Alberta, Syncrude Canada operates large oil-sands mines and an upgrading facility that produces a light, sweet crude oil on behalf of its joint venture owners, which include Canadian Oil Sands Limited, ConocoPhillips Oilsands Partnership II, Imperial Oil Resources, Mocal Energy Limited, Murphy Oil Company Ltd., Nexen Oil Sands Partnership, and Petro-Canada Oil and Gas.
Canadian Oil Sands provides a pure investment opportunity in the Syncrude Project through its 36.74 per cent working interest. The Trust is an open-ended investment trust managed by Canadian Oil Sands Limited and has approximately 481.5 million units outstanding, trading on the Toronto Stock Exchange under the symbol COS.UN.
Forward-looking statements in this release include, but are not limited to, statements with respect to: the expected cost for the SER project and the timing for incurring the costs in completing such project as well as the expected level of reduction in the sulphur and particulate matter levels from the SER project. 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 release include, but are not limited to: the difficulties of completing construction of any large facility that is part of an operationally complex, integrated facility, especially in extremely cold temperatures, inflationary cost pressures and the impact of labour shortages on construction, the uncertainties around the implementation of new technologies and such other risks and uncertainties described from time to time in the reports and filings made with securities regulatory authorities by the Trust. You are cautioned that the foregoing list of important factors is not exhaustive. Furthermore, the forward-looking statements contained in this release are made as of the date of this release, and the Trust does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this release are expressly qualified by this cautionary statement.
Canadian Oil Sands Limited Marcel Coutu, President & Chief Executive Officer Units Listed - Symbol: COS.UN Toronto Stock Exchange
