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Value Creation's oil sands upgrader halted - report
September 25, 2008 / 3:40 PM / 9 years ago

Value Creation's oil sands upgrader halted - report

CALGARY, Alberta, Sept 25 (Reuters) - The planned C$4 billion ($3.9 billion) Heartland upgrader, backed by the closely held Value Creation Group, has been mothballed, Canadian media reports said on Thursday.

The Edmonton Journal said construction on the planned 77,500 barrel per day facility, being built at a refining hub in Strathcona County, northeast of Edmonton, Alberta, has been halted.

The newspaper quoted an official from the county’s economic development department, who said company officials had told him that construction would be delayed by three or four years.

The upgrader would convert tar-like bitumen stripped from the region’s vast oil sands into refinery-ready synthetic crude.

The Heartland upgrader has regulatory approval to expand to process as much as 260,000 barrels a day. The facility’s first phase was scheduled to be completed in 2011.

Construction costs for oil sands projects have skyrocketed because of rising labor and material prices.

Earlier this month Petro-Canada PCA.TO said the estimated tally for its Fort Hills oil sands project had climbed 50 percent in a year, to at least C$21 billion. As well, other smaller firms in the region have found it difficult to get financing for major projects.

Value Creation officials could not be immediately reached for comment. ($1=$1.04 Canadian) (Reporting by Scott Haggett; editing by Rob Wilson)

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