But the Canadian and Australian owners of the Stuart oil shale project in central Queensland are not doing too much celebrating at the moment.
The controversial project - aimed at demonstrating the viability of extracting crude oil from shale deposits - is nearly a year behind schedule and $22 million (9%) over its original budget of $239 million.
Earlier this week Suncor Energy, the Canadian operator, said technical modifications needed to improve the plant's performance would require further expenditure of up to A$25 million on its behalf (A$50 million in total).
The plant upgrades could take between now and April 2001 to complete.
Moreover, Suncor's directors agreed to write down C$80 million of the company's investment in the project, reflecting increased costs and delayed oil production.
Designed to produce around 4500 barrels a day, the plant's total volume of oil in process and tank storage as of the end of July was just 15,600 barrels.
Smelly emissions have been the major problem for Suncor and its Australian partners Southern Pacific Petroleum (SPP) and Central Pacific Minerals (CPM).
The plant is now entering an eight-week "turnaround", during which new flue gas scrubbing equipment will be installed.
This equipment, together with a number of other changes, is aimed at reducing sulphur dioxide, fines and odour emissions.
But even these fixes may not get the project out of the woods.
Suncor said that, once the upgrade is commissioned, it would take a further six to nine months of operating experience to demonstrate the technology before making longer-term investment decisions.
Assuming the technology works, the partners plan to invest $2.5 billion over a decade to develop a full-scale 85,000-barrel-a-day facility.
Jim McFarland, managing director of both SPP and CPM, said he was not surprised by Suncor's write down, which reflected the variation in accounting practices between Australia and Canada.
"SPP/CPM's share of costs incurred to 30 June 2000 of $109 million will remain capitalised at this time based on the view that these costs are expected to be recovered from future revenues," he said.
"We are confident we can get these operational issues behind us," he told MiningNews.net. "One day of continuous operation is not enough - we realise that six or nine months of constant progress is needed before we can declare victory."
McFarland said the higher-than-expected level of fumes surprised the partners as emissions never emerged as an issue during pilot plant trials in Canada.
"We produce sulphur dioxide and other sulphur compounds, but you can't pinpoint one single compound that gives the odour," he said. "You are talking about compounds that are in concentrations of less than 10 parts per billion."
Nevertheless, even those low concentrations are enough to produce unpleasant odours for local residents, including fruit and cattle farmers within a 6km radius of the plant.
The partners aim to match the odour guidelines set by the Queensland government, which recommend that plants meet the specified odour limit 99.5% of the time.
"That allows around 44 'stink hours' per year," McFarland said.
He remained confident about the project's long-term prospects.
"If you look at the core technology itself, the progress has been pretty encouraging," he said.
"We have produced an on-spec product and have run raw crude through the plant, so they have been significant achievements."
The partners hope to be at 60-65% of capacity by the end of the year. Longer term, they aim to achieve 85% of the nameplate capacity of 4500 barrels a day in roughly two years time.
"Effectively this is an R&D plant with very little redundancy," he said. "So you'd expected lower availability than in a normal commercial operation. If we get to 85% we'll be doing well."
