A group of Northern Alberta Indigenous communities has teamed up with Suncor Energy Inc. to purchase TC Energy Inc.’s stake in an oilsands pipeline.
The partnership between oilsands producer Suncor and the Tahsipiy (Three Rivers) group of eight Indigenous communities announced plans on Thursday to acquire TC’s 15% share in the Northern Courier Pipeline. The 90-kilometer (54-mile) dual pipe conduit transports oilsands products north of Fort McMurray. The stake is valued at C$1.3 billion ($1 billion).
The purchase would be completed by Astisiy LP, which includes Suncor and the eight Indigenous communities. Astisiy is a Cree word meaning “sinew.”
Suncor President Mark Little called the pipeline deal a step in “progressive relationship building and economic reconciliation.” Suncor previously sold a 49% ownership of a jumbo oilsands tank farm for C$500 million ($400 million) to Fort McKay First Nation and Mikisew Cree First Nation.
Annual toll and terminal revenues of C$16 million ($12.8 million) are forecast for the partnership, as reliable service fees that the facilities would earn regardless of fluctuating oil prices.
The Indigenous partners include Athabasca Chipewyan First Nation, Chipewyan Prairie First Nation and Fort McMurray First Nation. It also includes the Conklin, Fort Chipewyan, Fort McKay, McMurray, and Willow Lake Métis communities.
“The Northern Courier Pipeline opportunity demonstrates progressive relationship building and economic reconciliation between industry and Indigenous communities,” said Athabasca Chipewyan Chief Allan Adam.
Alberta Indigenous Opportunities Corp., a government agency, is backing the pipeline deal with a loan guarantee of up to C$40 million ($32 million). Another provincial agency, Alberta Investment Management Corp., is majority owner of Northern Courier.
The transaction foreshadows much larger Indigenous participation in Trans Mountain Pipeline following an expansion now under construction that would nearly triple capacity to 890,000 b/d. The pipeline carries oil from Alberta to British Columbia (BC) for export.
After buying the line for C$4.5 billion ($3.6 billion) when environmental protests hurt project economics for previous owner Kinder Morgan Inc., the Canadian federal government invited 129 Indigenous communities to consider eventual investments.
Discussions generated bids for up to 100% ownership of Trans Mountain from two Alberta and BC Indigenous groups: Project Reconciliation, and the Chinook Pathways partnership of Western Indigenous Pipeline Group and Pembina Pipeline Corp.
Participation in industry ranges from roles in environmental monitoring to contractor firm ownership for 23,000 First Nations and Métis residents of 24 native settlements in the Alberta oilsands region, according to Natural Resources Canada.
Evolving relationships have matured into an “Indigenous supply chain” for services from work camp catering to earth moving, show surveys by the Canadian Association of Petroleum Producers (CAPP).
Annual oilsands industry procurement from Indigenous firms hit C$2.4 billion ($1.9 billion) before the Covid-19 virus struck. Activity is reviving as global economies and energy demand recover from the pandemic, said CAPP.
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