Fort Hills won’t be last big project from Suncor in oilsands, CEO says
Calgary-based firm promises investment if new export pipelines built in Canada
Suncor Energy Inc. says it’s not done building major oilsands projects, dampening widespread speculation among analysts that the Fort Hills project would be the last new major mine built in the formation.
The Calgary-based company would “definitely” build a new oilsands mine in the future, Suncor’s president and CEO Steve Williams told a business audience to mark the official launch of the $17-billion project, built with joint-venture partners Teck Resources Ltd. and Paris-based Total SA.
Alberta Premier Rachel Notley and federal Natural Resources Minister Amarjeet Sohi were also in attendance.
“The Canadian oilsands are one of the biggest and best oil reserves in the world,” Williams said.
“We will open mines,” Williams said, but cautioned that it won’t be committing to major mining investments anytime soon, or at least until new export pipelines are built in Canada.
The company will make decisions on its next growth project in the second half of 2019 or early 2020, Williams said.
For now, the company will focus on phased expansions of the company ’s three existing oilsands mines in Fort McMurray. The Fort Hills project currently produces 150,000 barrels of oil per day and is expected to ramp up to its full capacity of 194,000 bpd by the fourth quarter.
The Canadian oil industry’s efforts to build new pipeline projects have been derailed amid opposition from First Nations and environmental groups.
Compounding the problem, a number of major international oil companies such as Total have either exited or significantly reduced their stake in oilsands assets due to a combination of low oil prices, high costs, and pressure from environmental groups, sapping investor confidence.
Meanwhile, the Trans Mountain pipeline, which the federal government recently bought from Kinder Morgan Inc., suffered a setback in August after the Federal Court of Appeal ruled that Indigenous communities had not been sufficiently consulted and the National Energy Board should have studied the impact of oil tankers on West Coast marine wildlife.
Notley and Sohi both reiterated at the event that the Alberta and federal governments were committed to the pipeline, which
The Canadian oilsands are one of the biggest and best oil reserves in the world . ... We will open mines.
would parallel an existing line from Alberta to British Columbia.
Notley said the challenges facing the Trans Mountain pipeline expansion shows her province can do everything by the book and still get shortchanged.
While the recent ruling has provoked frustration and anger in Alberta, her government will continue to fight to get it built, as the ongoing pipeline bottlenecks is costing the province $40 million a day, she said.
While the Alberta government does not have standing to launch an appeal to the Supreme Court on its own, if an appeal is filed to the Appeal Court ruling, then Alberta would immediately apply for intervener status, she said.
“They’re consulting with their lawyers, we’re consulting with our lawyers, we’re trying to make sure we have the most secure and reliable path forward,” Notley said at the Fort Hills project opening.
Sohi noted that the federal government is mulling an appeal, new legislation and other steps but said a decision has not been reached.
“We also believe in moving forward on this project in a timely fashion and understand the urgency of it,” Sohi said.
“We do not want to make a decision in haste that will get us into the same position as we are in today.”