Sell the Farm, Gain an Ally

Alberta Oil - - OBSERVER -

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.

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