First phase of Imperials Kearl mine to cost 2billion more than expected

CALGARY — The first phase of Imperial Oil Ltd.’s Kearl oilsands mine will cost $2 billion more than its most recent estimate as the company faced issues transporting Korean-made modules to the mine site in northern Alberta and contended with harsh weather during startup.This is the second cost increase for the $12.9-billion project. Its initial price tag was $7.9-billion in 2009, later raised to $10.9-billion two years later when changes were made to its scope and design.Taking into account a second $8.9-billion phase in the works, the whole development is expected to have a cost of $6.80 per barrel, up 10% from a prior estimate of $6.20.When the Calgary-based firm announced in 2009 that it would build the Kearl mine, it expected three phases of roughly the same size. Later, it decided to build the mine in two phases, with smaller projects along the way to boost output in increments.The cost overrun is likely to have an impact on the reputation of Imperial, and its U.S. parent company ExxonMobil Corp., as “premium” operators, wrote CIBC analyst Andrew Potter in a note to clients.Imperial faced legal and regulatory delays in bringing enormous pieces of equipment to the mine site, which were shipped across the Pacific and then through the United States and Canada by river barge and truck.The 200 modules had to be broken up into smaller pieces so that they could be transported along interstate highways and then put together again near Edmonton.“This was an enormous work effort… involving hundreds of workers for more than a year,” said Imperial spokesman Pius Rolheiser.Imperial rejigged the order in which the work was conducted so that it wouldn’t be thrown completely off schedule.But that meant commissioning and startup activity timelines were “compressed” and had to take place during harsh winter weather.“We’ve been dealing with minus 40 (degree) weather at times and that necessarily has an impact from a safety perspective on how employees can work,” said Rolheiser.In the end, Imperial expects Kearl to start churning out bitumen during the first three months of this year, a bit later than its previous late 2012 target.Potter said there’s still some risk to the schedule.“We would not be surprised to see production not starting up until May,” he wrote.Despite the challenges, Kearl remains a “very, very attractive project” that will produce oil for four or five decades, Rolheiser said.The cost estimate of the second phase remains at $8.9-billion and is not at risk of being jacked up by the same factors that affected the first.“With the exception of that one unnecessary external factor — the module transportation delays, which couldn’t have been anticipated and over which we had no control — the execution of the Kearl initial development was exemplary from a productivity standpoint, most importantly form a safety standpoint,” said Rolheiser.Also Friday, Imperial reported a 7% increase in net income in the fourth quarter as lower expenses more than offset a decrease in revenue.Imperial, a publicly traded subsidiary of Houston energy heavyweight ExxonMobil Corp., said net income in the last three months of 2012 was $1.07-billion or $1.26 per share, above 2011’s $1.01-billion, or $1.18 per share.It also handily beat analysts estimates of 99 cents per share, according to Thomson Reuters.Revenue fell to $7.8-billion from $8.1-billion, in line with estimates. However, expenses also dropped to $6.39-billion from $6.86-billion.In afternoon trading on the Toronto Stock Exchange, Imperial shares were down two cents at $43.78.The Canadian Pres read more

Prince Philip turns on the charm as he meets Kylie Minogue at Windsor

first_imgPrince Philip handed Kylie the Britain-Australia Society Award Kylie Minogue wore floor-length floral chiffon dress as she met Prince PhilipCredit:Steve Parsons/PA Prince Philip handed Kylie the Britain-Australia Society Award Credit:Steve Parsons/PA The Britain-Australia Society Award “I was just presented with the Britain-Australia Award by His Royal Highness the Duke of Edinburgh, which was absolutely lovely. We had a good old chat. He was charm personified.”  “We are here in the quadrangle of Windsor Castle, which is terribly exciting,” she said in an interview posted on the Royal Family’s Twitter account. Want the best of The Telegraph direct to your email and WhatsApp? Sign up to our free twice-daily  Front Page newsletter and new  audio briefings. Kylie, 48, won the hearts of the British public while playing Charlene in the hit soap Neighbours in the mid 1980s. Philip is himself a Knight of Australia. But his award on Australia Day in 2015 provoked severe criticism of the then Australian prime minister Tony Abbott, with critics accusing him of creating a “time warp” by awarding a member of Britain’s royal family the country’s highest honour. She went on to launch a pop career with early hits including I Should Be So Lucky and Je Ne Sais Pas Pourquoi, before later remodelling herself from the girl-next-door to a sultry diva wearing gold hot pants with hit tunes such as Spinning Around.center_img The Britain-Australia Society Award given to Kylie MinogueCredit:Steve Parsons/PA The Duke chatted to the Can’t Get You Out Of My Head singer in the castle’s grand White Drawing Room as he handed over the Britain-Australia Society Award for 2016 in his capacity as patron of the Britain-Australia Society.Also present were the Australian High Commissioner Alexander Downer and chairman of the Britain-Australia Society Peter Benson.On Tuesday afternoon, Kylie said on Twitter that she was “honoured” to have been given the award: Kylie Minogue wore floor-length floral chiffon dress as she met Prince Philip What an honour. Thank you❣— kylie minogue (@kylieminogue) April 4, 2017 The performer, who already has an OBE, said after her award was announced at a reception at Australia House on Monday evening: “I’m a proud ‘Aussie’, but Britain has a very strong place in my heart having lived and worked here for many years.”The Society does a wonderful job to promote the rich cultural ties between the two countries and I am honoured to be recognised by them in this way.” It is not Philip’s first encounter with Kylie. He watched her perform at the Windsor Castle pageant in May last year, staged in honour of the Queen’s 90th birthday, and met her during the red carpet line-up.But he missed her stint on stage at the Diamond Jubilee concert in front of Buckingham Palace in 2012 while he was being treated in hospital for a bladder infection. Quadrangle at Windsor Castle!! 🕍— kylie minogue (@kylieminogue) April 4, 2017 The Duke of Edinburgh turned his charm on Kylie Minogue when he met the pop star during a private audience at Windsor Castle.The pair appeared to get on famously, laughing and joking throughout the meeting, in which he presented the Australian singer with an award honouring her contribution to Anglo-Australian relations. Prince Philip, 95, was pictured grinning broadly as he welcomed Kylie to the Queen’s Berkshire residence on Monday night.The star discussed her new album with the Duke and they chatted about how much effort goes into making a record. Kylie described the Duke as “charm personified” and said they had a “good old chat”.Kylie unsurprisingly opted for a more demure look than her trademark gold hotpants and was dressed in a floor length floral chiffon dress.last_img read more