Suncor Energy Inc. (NYSE: SU) said Jan. 3 that it and Teck Resources Ltd. (NYSE: TECK) have taken higher stakes in the Fort Hills oil sands mine from partner Total SA (NYSE: TOT), resolving a dispute over building costs.
Under terms of the deal, Suncor and Teck will fund more of the C$17 billion (US$13.56 billion) project’s capital cost—C$300 million (US$239 million) and C$120 million (US$96 million) more, respectively. Suncor’s share of the project will be 53.06%, compared to 20.89% for Teck and 26.05% for Total.
Calgary-based Suncor, Canada’s second-largest energy producer, told investors in July 2017 that it was in dispute with the French company, which had refused to provide any more funding for the massive project in northern Alberta.
“We’re pleased to have reached this agreement and taken a bigger stake in what is arguably the best long-term growth project in our industry,” Suncor CEO Steve Williams said in a statement.
Fort Hills produced 6,000 barrels per day (bbl/d) during fourth-quarter test runs and is expected to fully start production in mid-January when the first of three secondary extraction trains starts up, Suncor said.
The company had previously said it would produce first oil at Fort Hills by the end of 2017.
Once ramp-up operations are complete, Fort Hills will produce 190,000 bbl/d, and Suncor expects the plant to reach 90% of capacity by year-end 2018.
The startup comes as increasing oil sands supply outpaces Canadian pipeline capacity, contributing to a deepening price discount for Canadian heavy crude compared to benchmark West Texas Intermediate.
Suncor produced 736,000 barrels of oil equivalent per day in fourth-quarter 2017, in line with record production in the previous quarter.
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