North West Redwater Partnership also said in a news release Wednesday that the startup date for its bitumen upgrader has been pushed back to September 2017 from mid-2016.
When the project was approved in November 2012, the cost was estimated at $5.7 billion.
The partnership, made up of North West Upgrading Inc. and Canadian Natural Upgrading Limited, a wholly owned subsidiary of Canadian Natural Resources Limited (TSX:CNQ), said the higher cost is "due to a combination of cost inflation and the inability to fully capture certain cost savings initiatives."
It also says that it believes the merits of the project are still positive.
The refinery is expected to process 50,000 barrels per day of raw bitumen supplied by Canadian Natural and the Alberta Petroleum and Marketing Commission.
"The toll payers believe, that upon successful completion of the project, this refinery will strengthen their organizations through providing a competitive return on investment and by adding 50,000 barrels per day of bitumen conversion capacity in Alberta which will help improve pricing and reduce pricing volatility on all Western Canadian heavy crude oil that they produce or are entitled to market through royalties," the press release said.
"This project will provide a local market for Alberta oilsands production that is not reliant on export pipelines, and a low carbon solution that will ensure that the CO2 footprint of the products produced by the refinery will be among the lowest in the world."Suggest a correction