Fort Hills Partners try to recoup costs of substandard fire-proofing
Suncor Energy and the Fort Hills partners have launched a lawsuit against Norwegian firm Jotun, seeking to recoup a minimum of $182 million for allegedly applying sub-standard fire-proofing to some of the plant's structural steel. One of Jotun's affiliates and a contractor are also named in the lawsuit.
Suncor disclosed the issue last February when it announced cost escalation at the oil sands mine. The company says the problem stems from a "material quality issue associated with structural steel passive fire protection" leading to "a higher level of risk of property damage at the mine than originally envisioned and accepted." The suit is in response to the added cost of removing and replacing the faulty coating, a process the company says will take at least five years.
Passive fire-protection is a coating applied to the structural steel in areas that contain large volumes of hydrocarbons, such as secondary extraction. The coating insulates the steel from the extreme heat, effectively buying time until the steel begins to melt and buckle.
The 194,000 bbl/day oil sands mine is expected to produce first oil before the end of this year. The facility has an estimated capital cost of $16.5 to $17.0 billion.
GLOBE AND MAIL SUNCOR HOPES TO AVOID FORT HILLS DELAY EVEN AS SUIT FILED AGAINST FIRE-PROTECTION SUPPLIERS OCT 16, 2017
OIL SANDS MAGAZINE SUNCOR BOOSTS CAPACITY AT FORT HILLS AND EXPANDS CAPITAL BUDGET TO $17 BILLION FEB 8, 2017