Canadian Natural reviews second quarter progress
2007-08-01 03:15 ET - News Release
Mr. Allan Markin reports
RE-RELEASE: CANADIAN NATURAL RESOURCES LIMITED ANNOUNCES SECOND QUARTER 2007 UPDATE ON THE PROGRESS OF THE HORIZON OIL SANDS PROJECT
Canadian Natural Resources Ltd. has provided a regular quarterly overview on the Horizon oil sands project.
"Canadian Natural achieved a major milestone on our Horizon project during the second quarter of 2007, with overall work progress at the end of the quarter reaching 75 per cent complete and field construction approaching two-thirds complete. All major vessels have either been erected or are currently on site. Work scheduled for the coming months will focus on mechanical construction, which is scheduled to be completed through a combination of lump-sum and reimbursable contracts. We continue to effectively execute our well-defined strategies," commented Real Doucet, senior vice-president, oil sands.
"The project remains on track for targeted start-up in the third quarter of 2008. Project progress slowed slightly during the quarter due in part to labour productivity, the temporary work shutdown on the tank farm and delays associated with a realignment of certain contract packages to match scope to the marketplace contractor supply to better manage costs.
"Despite the challenges of a construction market in Alberta operating at high capacity, we have been able to build our on-site manpower to over 7,000 personnel. With the success of our fly-in/fly-out program and managed open-site policy, we have been able to add workers as required.
"Management of costs continues to be a focus for the project team and we currently remain within our forecast estimate of 5 per cent to 12 per cent above our original $6.8-billion board authorization for construction capital spending.
"We are also well into our planning for commissioning and start-up. Our commissioning plans are established to identify the priority systems that will be required later this year and early in 2008. We are currently hiring and training operating personnel, setting up procedures and systems, and continue to develop our start-up strategies to ensure we stay on track for first oil."
HORIZON PROJECT STATUS SUMMARY
Mar 31, 2007 June 30, 2007 Sept 30, 2007
Actual Actual Plan Plan
Phase 1 -- work progress
(cumulative) 66% 75% 77% 88%
Phase 1 -- construction
capital spending(1)
(cumulative) 69% 79% 77% 85%
(1) Relative to overall phase 1 project construction capital
of $6.8-billion
Accomplished during the second quarter of 2007
Detailed engineering:
* Overall detailed engineering 97 per cent complete and substantially completed in most areas.
Procurement:
* Overall procurement progress is 95 per cent complete;
* Have awarded over $5.4-billion in purchase orders and contracts to date;
* Delivered to site over 30,000 standard loads;
* Operations and maintenance service and supply agreements are in negotiation.
Modularization:
* Delivered an additional 172 oversized loads to site during the quarter for a total of 1,424 loads, which represents approximately 86 per cent of the total requirement.
Construction:
* Overall construction progress is 63 per cent complete;
* Mine overburden removal has moved over 37 million bank cubic metres, which represents approximately 54 per cent of the total to be moved and is 1 per cent ahead of schedule;
* Construction of cofferdam for the tar river diversion completed in mining;
* Fabrication of crushing plants, surge facility and conveyor structure is 100 per cent complete in the ore preparation plant;
* Started erection of conveyors in ore preparation;
* Completed hot water tank in extraction;
* Hydrotested primary separation cells and hot water tank;
* Completed construction and hydrotesting of inclined plate settlers in froth treatment;
* Flare stacks installed in upgrading;
* Mechanically completed cooling tower piping;
* Mechanically completed inhibited water and cooling water pump-house buildings;
* 42-inch water pipeline completed;
* Wet gas compressor received and installed;
* Completed installation of coker and diluent recovery-unit process structures;
* Completed interconnecting welding of primary upgrading's piperacks;
* Energize main electrical substations R1/R2.
Milestones for the third quarter of 2007:
* Complete construction of Raw Water Pond;
* Extraction plant hydrotesting;
* Start of precommissioning activities in all bitumen production areas;
* Permanent power energized in R1/R2 corridors pump houses.
* Electrically energize main electrical substation;
* Start commissioning of Recycle Water Pond.
The company's results for the second quarter of 2007 will be released on Aug. 2, 2007. A conference call will be held on that day at 9 a.m. MT, 11 a.m. ET.
We seek Safe Harbor.
