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09/27/2021

Suncor Energy forms partnership to acquire interest in the Northern Courier Pipeline

Kelly Gray
Editor, Octane
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Suncor building
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Suncor announced last week the signing of agreements with eight Indigenous communities in the Regional Municipality of Wood Buffalo (RMWB) to acquire all of TC Energy’s 15% equity interest in the Northern Courier Pipeline Limited Partnership. This partnership includes Suncor, three First Nations and five Métis communities that will own a 15% stake in this pipeline asset with a value of approximately $1.3 billion, which will provide long-term, stable revenues that will benefit the communities for decades to come.

The purchase of Northern Courier Pipeline will be completed by Astisiy Limited Partnership (Astisiy), which is comprised of Suncor and a partnership of the following communities:

  • Athabasca Chipewyan First Nation
  • Chipewyan Prairie First Nation
  • Conklin Métis Local 193
  • Fort Chipewyan Métis Local #125
  • Fort McKay Métis Nation
  • McMurray Métis
  • Fort McMurray #468 First Nation
  • Willow Lake Métis Nation

With this collaboration in mind, Suncor obtained the rights to purchase all of TC Energy’s 15% equity interest in 2019, as part of Northern Courier Pipeline’s execution of long-term, non-recourse financing of $1 billion and TC Energy's sale of its remaining 85% interest to the Alberta Investment Management Corporation. The pipeline, which connects the Fort Hills asset to Suncor’s East Tank Farm asset, will be operated by Suncor upon completion of the purchase by Astisiy. The transaction is anticipated to close in the fourth quarter of 2021.

The Astisiy partners will benefit from revenues generated through competitive tolls from long-term transportation and terminalling services agreements supporting the pipeline, regardless of the price of crude. The partnership is expected to generate gross revenues of approximately $16 million annually for its partners and provide reliable income that the Indigenous communities can use at their discretion for decades to come.

The Indigenous communities’ participation in this transaction is funded by non-recourse financing that is supported by a loan guarantee of up to $40 million from the Alberta Indigenous Opportunities Corporation. TD Securities Inc. acted as Financial Advisor and Debt Arranger for the Indigenous communities in this transaction.

This investment and partnership are a result of years of collaboration and negotiations among all partners. An example of economic reconciliation, this partnership is unprecedented in this industry, given the number of Indigenous communities involved in this type of project.