JACOS raises cost estimate of Hangingstone oilsands expansion by 20 per cent

CALGARY – Japan Canada Oil Sands Ltd. is increasing its cost estimate for the Hangingstone oilsands expansion project in Alberta by about 20 per cent.

The project is a joint venture between JACOS, which is owned by a consortium of Japanese companies, and Calgary-based Nexen Inc. (TSX:NXN).

The parent company of JACOS says its portion of the expansion southwest of Fort McMurray is now expected to cost $1.5 billion, up from the previous estimate of $1.25 billion.

Startup of the expansion project remains scheduled for the middle of next year.

As of September, it was about 96 per cent complete.

The total cost of the Hangingstone expansion, including Nexen’s share, has been estimated at $1.8 billion.

Nexen hasn’t announced a revision to its cost estimate.

The Hangingstone expansion project is beside a smaller demonstration operation that has been idled since wildfires swept through the Fort McMurray area in May.

The company said in August that the demonstration project would remain idle until benchmark oil prices rose above US$50 a barrel. Japex said Tuesday it’s still evaluating the best time to restart production.