In early fall Suncor announced the signing of two participation agreements for the purchase of equity interests in Suncor’s East Tank Farm Development (ETF-D). The agreements with the Fort McKay First Nation and Mikisew Cree First Nation are for the purchase of a 34.3% and 14.7% equity interest in the ETF-D respectively, for a combined equity interest of 49%.
The East Tank Farm Development is a Suncor-operated midstream asset currently under construction in the Wood Buffalo Region of Alberta. The facility, which is expected to be operational in the second quarter of 2017, will consist of bitumen storage, blending and cooling facilities and connectivity to third party pipelines.
ETF-D will be a key logistics asset for the Fort Hills Oil Sands Mine. The share of the actual capital cost of the East Tank Farm Development is currently anticipated to be approximately $500 million which will be payable to Suncor upon closing. Revenue from the long-term terminaling services agreements with the Fort Hills partners will underpin financing for this transaction. Suncor will be the operator of the East Tank Farm Development once operational.
This $500 million investment is unprecedented in scope and scale for First Nations, Suncor and our industry.
“We are very excited that the Fort McKay and Mikisew Cree First Nations have joined us as partners in the East Tank Farm Development,” says Mark Little, EVP, Upstream, Suncor. “We have worked closely with both communities for many years and this type of joint venture partnership is an exciting next step for all of us. Not only will it provide the communities with a long-term revenue stream, but it also recognizes the value of relationships, building mutual trust and respect and strengthening the participation of Aboriginal Peoples in energy development.”
This story contains forward-looking information. Please see legal advisories for more information.