Suncor and Mikisew Cree First Nation are signing a participation agreement for the purchase of nearly 15 per cent interest in Suncor’s east Tank Farm Development.
As part of the agreement, MCFN will pay 14.7 per cent of the actual capital cost of the development once the assets become operational which is being projected for the second quarter of 2017.
“We are very excited that MCFN has joined us as a partner in the East Tank Farm Development,” said Mark Little, executive vice president, Upstream, Suncor. “We have worked closely with MCFN for many years and this type of joint venture partnership is an exciting next step for both of us. Not only will it provide the community with a long-term revenue stream, it recognizes the value of relationships, building mutual trust and respect and strengthening the participation of Aboriginal Peoples in energy development.”
MCFN’s share of the capital cost would be approximately $147 million which will be payable to Suncor upon closing.
The transaction is also subject to closing conditions which includes negotiation of definitive documentation, the First Nation getting suitable financing, due diligence among other conditions customary for transactions such as this.
As for financing the transaction, revenue will come from the long-term terminaling services agreements with the Fort Hills partners.
“The signing of this agreement has great significance for our people. It means long-term financial stability and increased independence while helping ensure future generations of our community remain a partner in regional development,” said Chief Steve Courtoreille, MCFN. “We are very pleased to be working together with our partners at Suncor in this business opportunity.”
This equity interest for the MCFN is in addition to the 34.3 per cent equity interest announced in September by Suncor and Fort McKay First Nation. In total, the combined equity by Fort McKay and MCFN in the develop would be 49 per cent.
Suncor will be the operator once operational with the facility consisting of bitumen storage, blending and cooling facilities and connectivity to third party pipelines.