Suncor reports ‘excellent progress’ as it pushes to finish $17B Fort Hills facility
Suncor Energy Inc. is pushing to complete construction of its $17-billion Fort Hills oilsands project as the company looks to produce the facility’s first barrel of oil by the end of December.
“We continue to have excellent progress at Fort Hills,” Suncor spokesperson Sneh Seetal said, adding that construction crews on the site north of Fort McMurray, Alta., are “largely supporting commissioning activities.”
The last part of the plant to be commissioned is the “secondary extraction” facility, which processes bitumen froth into bitumen. All other parts of the oilsands mine and processing facility — a massive joint venture between Suncor, Paris-based Total SA and Vancouverbased Teck Ltd. — are complete and ready to begin producing oil.
Seetal could not say whether Fort Hills would be able to produce its first barrel of oil by the end the month as planned, but it is still the company’s goal.
During investor presentations at the beginning of December, Suncor communicated three key messages to analysts, one of which was that the Fort Hills project was on track to produce first oil by the end of the year, BMO Capital Markets analyst Randy Ollenberger said in a note.
Seetal said Suncor has conducted five test runs at the oilsands project and produced 1.4 million barrels of bitumen froth so far. She said the froth has been loaded onto trucks and sent to the company’s existing oilsands base plant closer to Fort McMurray for processing.
Progress on the last portion of the extraction plant at Fort Hills is being closely watched and analysts expect the facility, which will be able to process 194,000 barrels per day, to cost about $17 billion when finished. Suncor has said it expects Fort Hills to operate at 50 to 60 per cent capacity over the course of 2018.
Suncor has been paying Total’s share of construction costs since the French oil major in July announced it would not provide any more funding as costs rose.
“We expect that Suncor will eventually recoup these costs from Total either in the form of cash or an increased working interest in the project,” GMP FirstEnergy analyst Michael Dunn said in a research note. “Given that we suspect Suncor has a standing bid for Total’s working interest that is well below cost, this standoff may be a way for Total to effectively sell a small portion of its working interest at cost.”