A Suncor oil sands operations north of Fort McMurray, Alta.Fred Lum/The Globe and Mail
Suncor Energy Inc. is selling a one-third stake in an oil-storage terminal in northern Alberta to the Fort McKay First Nation, as the energy giant looks to deepen ties with aboriginal groups closest to the oil sands.
Suncor said on Tuesday the aboriginal group is paying $350-million for a 34.3-per-cent interest in its East Tank Farm, which is under construction north of Fort McMurray, Alta.
Under the deal, Fort McKay will issue debt underpinned by terminal fees to finance the transaction.
It would be among the biggest bond issues by an aboriginal group, Mark Little, executive vice-president of Suncor's upstream division, said Tuesday. The partnership will also help offset losses at Fort McKay-owned businesses hurt by the oil slump, he said.
"All of the suppliers and service providers are under threat about squeezing margins, and so the amount of profit that's being generated for the First Nation through all their business ventures is declining," he said.
The East Tank Farm will handle crude pumped from Suncor's $15-billion Fort Hills mine, a joint venture with Teck Resources Ltd. and Total SA of France that's due to add 180,000 barrels per day of new capacity in northern Alberta starting later next year.
Suncor will remain operator of the storage facility. The deal is expected to close in the second quarter of 2017 subject to conditions, including the Fort McKay band obtaining financing.