The cost of Teck Resources’ (TSX:TECK.A, TECK.B) Fort Hills oil sands project could end up being up to $1.9 billion more than what was originally anticipated, the Vancouver miner has revealed.
Teck’s partner in the venture, Suncor Energy (TSX:SU), said the cost increase was caused by last year’s devastating wildfires in Fort McMurray, along with construction changes to boost capacity.
Teck said it expects its share of the project to cost $805 million, or about 10% more than forecast, and as a result the miner will record an after-tax impairment charge of $164 million in its fourth quarter results.
The cost per barrel, however, will remain at about $84,000 per flowing barrel of bitumen because nameplate capacity has been increased to 194,000 barrels per day from 180,000 bpd, Suncor said while delivering fourth quarter results.
“Bringing our key major growth projects, Fort Hills and Hebron, to first oil by the end of this year continues to be a top strategic priority for us," Suncor chief executive officer, Steve Williams, said in the statement.
Both Teck and Suncor said the project was 76% complete as of December 31 and that it remains on track to produce first oil in late 2017.
