* Total says delays, overruns, dispute costing 100 million euros
* French firm says construction project "on thin ice"
(Adds comments, details)
By Kate Kelland
LONDON, June 23 (Reuters) - French oil company Total said on Tuesday delays and stoppages on a construction project at an English refinery had cost it 100 million euros ($138.6 million) and were jeopardising the investment.
Total said it was "actively encouraging" talks to try to resolve a dispute with some 650 construction workers at the Lindsey refinery in eastern England sacked last week after they took unofficial strike action in protest against threatened redundancies on the HDS-3 desulphurisation unit.
"The HDS-3 project is now six months behind schedule and the delays, under performance and low productivity have already cost in the region of an additional 100 million euros," Total said in a statement.
It said further overruns would "jeopardise the future viability of this important inward investment into the UK".
A spokesman described the project as being "on thin ice".
But Total reaffirmed production had not been affected at the refinery, which processes about 223,000 barrels of crude oil per day. The unit reduces the sulphur content in diesel.
Building diesel-making units is key for refiners in Europe, where diesel consumption is expected to grow at the expense of gasoline.
Hundreds of sacked contract workers burnt their dismissal letters outside Lindsey refinery on Monday in a symbolic act of defiance against Total.
The French firm said it had been told by its contractors they would not be able to confirm how many of their former workers wish to return to work.
"However, the contractor companies have advised us that they believe they will have sufficient workforce necessary to meet their programming requirements," it added.
Union sources said as many as 900 contractors had been dismissed in the dispute, sparked after about 50 workers were made redundant while others were being hired.
The walkout began on June 11 and has promoted sympathy strikes at energy facilities across the country.
Les Bayliss, assistant general secretary of the Unite union, said he hoped talks between unions and employers representatives expected on Tuesday would help hammer out a solution.
"We are confident we can find a mechanism to get a return to work, but top of the agenda is the reinstatement of the people who have been sacked, so unless that issue is dealt with, we are going to have a continued problem," he told BBC radio.
The Lindsey refinery was at the centre of a dispute earlier this year over the use of foreign labour on contract projects.
The British government has said all parties should support mediation efforts to resolve the dispute. (Editing by Sue Thomas)