Sell the Farm, Gain an Ally
IT MIGHT NOT BE THE BIGGEST DEAL IN the history of the oil sands, but it’s certainly an interesting one nonetheless. The rare partnership between oil sands giant Suncor and a northern Alberta First Nation is worth $350 million to the company and a significant ownership stake in a crude oil tank farm for the aboriginal government. The Fort McKay First Nation, located north of Fort McMurray, agreed to buy 34.3 per cent of Suncor’s East Tank Farm project, which will store, cool and blend bitumen from the nearby Fort Hills mine before transporting it via pipelines.
But for Suncor, the deal is about much more than cash. The oil sands producer has been making highly visible attempts to realign—or at least soften—its image among groups that have historically opposed oil sands development on ideological or environmental grounds. The company would be hard-pressed to find a more willing and capable dance partner than the Fort McKay, a nation that has long invested in energy development and service companies in northern Alberta—bettering its economic outlook dramatically.
For the people of Fort McKay, the acquisition comes at a time when oil sands infrastructure is selling relatively cheap and is, therefore, likely a prudent long-term investment for the nation. The yet-to-be-built tank farm will serve Suncor’s majority-owned Fort Hills oil sands project once the $13.5-billion facility begins producing oil late next year.