October 26, 2017 / 5:54 PM / in 23 days

Suncor says makes progress in oil sands project dispute with Total

CALGARY, Alberta (Reuters) - Suncor Energy, Canada’s second-largest energy producer, said on Thursday it has made progress in resolving a commercial dispute with joint venture partner Total SA over funding for the new Fort Hills oil sands mining project.

FILE PHOTO - A Suncor refinery is seen in Sherwood Park, near Edmonton, Alberta, Canada November 13, 2016. REUTERS/Chris Helgren/File Photo

Calgary-based Suncor is the majority owner and operator of the Fort Hills joint venture in northern Alberta.

The plant, which is the last oil sands project to be built from scratch on a massive scale, is expected to be operating at 90 percent of its 190,000 barrel-per-day capacity by this time next year, Suncor Chief Executive Steve Williams said on the company’s third-quarter earnings call.

Suncor flagged the dispute to investors in July after Total refused to provide more funding for Fort Hills.

Williams said on Thursday the sums involved were not significant and would not affect the timing of oil being produced from Fort Hills later this year. He did not give details on how the dispute was being resolved.

Suncor reported better-than-expected third-quarter earnings on Wednesday evening, citing record production and strong refinery output.

The company’s shares were last up 2.1 percent at C$43.04 on the Toronto Stock Exchange.

Once Fort Hills is complete, Suncor will focus on boosting production at its main oil sands assets in the Fort McMurray region, which include the company’s 350,000 bpd oil sands base plant and the 350,000 bpd Syncrude joint venture, in which Suncor became majority owner in early 2016.

“As we go through the next few years we expect to identify some real opportunities between Syncrude and Suncor... some of that’s by connectivity into the base plant, and we think there are real opportunities around Fort Hills as well,” Williams said.

Suncor got a boost on Wednesday when the Alberta Energy Regulator approved its plan for managing the vast tailings ponds produced by its base plant mining operations.

The plan lays out how Suncor will treat and reduce the ponds, which contain often toxic waste products from mining. Some environmental groups have criticized the plan for not being ambitious enough.

Reporting by Nia Williams; editing by Marguerita Choy and Dan Grebler

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