$ 40 million Suncor-Indigenous partnership “a sign of things to come” for the oil industry – .

0
26
$ 40 million Suncor-Indigenous partnership “a sign of things to come” for the oil industry – .


The 90-kilometer Northern Courier pipeline transports bitumen, diesel and thinner in Alberta between the Fort Hills oil sands mine operated by Suncor and the company’s eastern tank farm terminal north of Fort McMurray.

JASON FRANSON / The Canadian Press

A $ 40 million partnership agreement between eight Indigenous communities and Suncor Energy Ltd. is being hailed as an economic boost for communities across northern Alberta, as they unite to purchase a stake in a pipeline critical to the energy giant’s operations in the oil sands.

Those involved in the deal say the Indigenous Energy Partnership is a sign of things to come in the oil industry, which has long strived to ensure proper consultation on energy projects. Under the deal, announced Thursday, a joint Suncor-Indigenous partnership called Astisiy will buy 15% of the Northern Courier pipeline from TC Energy.

The remaining 85 percent stake in the pipeline remains in the hands of Alberta’s investment manager, Alberta Investment Management Corp., or AIMCo, which bought it two years ago.

The story continues under the ad

The 90-kilometer Northern Courier pipeline was built in 2018 by TC Energy (then called TransCanada Pipeline Ltd.). It transports bitumen, diesel and diluents in Alberta between the Fort Hills oil sands mine operated by Suncor and the company’s eastern tank farm terminal north of Fort McMurray.

Suncor and Cenovus plan to restart Terra Nova oilfield as global energy companies sell stakes

The new Astisiy partnership was forged between Athabasca Chipewyan First Nation, Chipewyan Prairie First Nation, Métis Local 193 of Conklin, Métis Local 125 of Fort Chipewyan, Métis Nation of Fort McKay, Métis of McMurray , Fort McMurray First Nation # 468, Willow Lake Métis Nation. and Suncor.

The eight communities are based in the Regional Municipality of Wood Buffalo, which is in the northeast corner of the province and includes Fort McMurray.

The partnership is expected to generate gross annual revenues of approximately $ 16 million for its partners. The transaction is expected to be finalized in the fourth quarter of 2021.

Bill Loutitt, general manager of McMurray Métis, told The Globe and Mail that the expected revenues from the pipeline will help fund a new cultural center on MacDonald Island in Fort McMurray.

“For our community, it’s a real shot in the arm,” said Loutitt.

The deal reflects years of building relationships between local Indigenous communities and companies like Suncor, said Loutitt, calling it “quite a feat” for Suncor to reach an agreement with eight communities.

The story continues under the ad

“This is an opportunity for our young people to say, ‘I work for our own business and I give back profit to the community,’” he said.

Ron Quintal, president of the Fort McKay Métis Nation, said the deal was about more than investing in the oilfield.

“What it shows is that Indigenous communities and energy can go hand in hand and use those dollars not only to enable their communities to get the services they need, but we can turn around and take those dollars. income and invest it in other opportunities, like green energy, ”he said.

Indigenous communities’ membership in Northern Courier is supported by a loan guarantee of up to $ 40 million from the Alberta Indigenous Opportunities Corp., or AIOC.

This is the third major infrastructure agreement supported by AIOC, a Crown corporation created by the United Conservative government of Alberta as part of a 2019 election campaign promise.

Alicia Dubois, CEO of AIOC, said the large number of communities involved – combined with the partnership between First Nations and Métis communities – made the deal a “historic first.”

The story continues under the ad

Ms. Dubois said in an interview that the AIOC loan guarantee means that the partners will be able to negotiate more favorable loan terms, which in turn will increase their share of the income.

“It was an extraordinarily strong deal,” she said. “This is truly an example of the kind of Indigenous-industry partnership that CNA would love to do over and over again. “

AIMCo acquired its 85% stake in Northern Courier from TC Energy in May 2019, for approximately $ 1.15 billion.

Ben Hawkins, senior vice president of infrastructure and renewable resources at AIMCo, told The Globe that as more countries focus on achieving net zero emissions by 2050, “there is a myriad of exciting opportunities that will play out over the next 30 years ”in sectors such as renewables and batteries.

“More importantly, we’re not ready to make this full transition to net zero just yet,” said Mr. Hawkins. “So we see traditional energy sources – or the infrastructure that transports traditional energy sources – as still extremely important and potentially good investments ultimately helping us bridge that net zero reality. “

Your time is precious. Receive the Top Business Headlines newsletter delivered to your inbox in the morning or evening. register today.

LEAVE A REPLY

Please enter your comment!
Please enter your name here