October 19, 2016 [OPIS] - Suncor and Mikisew Cree First Nation (MCFN) said that MCFN will buy a 14.7% interest in Suncor's East Tank Farm Development.
The East Tank Farm Development is a Suncor-operated midstream asset currently under construction in the Wood Buffalo Region of Alberta. The facility will consist of bitumen storage, blending and cooling facilities and connectivity to third-party pipelines.
Under the terms of the agreement, MCFN will pay 14.7% of the actual capital cost of the East Tank Farm Development once the assets become operational, which is currently anticipated to be in the second quarter of 2017.
MCFN’s 14.7% share of the actual capital cost of the East Tank Farm Development is currently anticipated to be approximately $147 million, which will be payable to Suncor upon closing. The transaction is subject to a number of closing conditions including the negotiation of definitive documentation, the First Nation obtaining suitable financing, due diligence and other conditions customary for transactions of this nature and is anticipated to close in the second quarter of 2017.
Revenue from the long-term terminaling services agreements with the Fort Hills partners will underpin MCFN’s independent financing of the transaction. Suncor will be the operator of the East Tank Farm Development once operational.
MCFN’s equity interest is in addition to the 34.3% equity interest announced in September by Suncor and Fort McKay First Nation. The combined equity interest by Fort McKay First Nation and MCFN in Suncor’s East Tank Farm Development is 49%.
