CORRECTED-Shell halts construction on new Alberta oil sands project

(In Oct 27 item, corrects C$ to US$ in ninth paragraph)
CALGARY, Alberta, Oct 28 (Reuters) - Royal Dutch Shell Plc
RDSa.L will not continue construction of its 80,000 barrel per
day Carmon Creek thermal oil sands project in northern Alberta
because of the lack of infrastructure to move Canadian crude to
market, the company said on Tuesday.
Shell said the decision to halt the project was also the
result of "current uncertainties" and chief executive Ben van
Beurden said the company was having to manage costs in today's
low oil price environment.
"We are making changes to Shell's portfolio mix by reviewing
our longer-term upstream options world-wide, and managing
affordability and exposure in the current world of lower oil
prices. This is forcing tough choices at Shell," van Beurden
said in a statement.
Canada's oil sands hold the world's third largest crude
reserves but carry some of the highest project breakeven costs
globally. Western Canada also struggles with market access
issues due to limited export pipelines, which can lead to a glut
of crude building up in Alberta and weighing on prices.
The plunge in benchmark oil prices has prompted a number of
companies to defer costly new oil sands projects, although so
far few have been cancelled outright once underway.
Shell originally sanctioned the Carmon Creek in October 2013
but said in March that it would be delayed by two years as the
company retendered some contracts and adjusted the design to
take advantage of lower costs during the market downturn.
On Tuesday the company said following a review of potential
design options, updated costs, and capital priorities, it had
decided the project did not rank in its portfolio at this time.
Shell, which owns 100 percent of Carmon Creek, will retain
the leases and preserve some equipment while continuing to study
options for the project.
The company expects to take net impairment, contract
provision, and redundancy and restructuring charges of around $2
billion as a result of the decision.
Last month Shell also pulled the plug on its plans to drill
for oil in the Arctic, citing high costs and disappointing well
results and in February shelved plans for its 200,000 bpd Pierre
River oil sands mining project.