TotalEnergies has completed the sale of TotalEnergies EP Canada Ltd., which holds a 31.23 percent working interest in the Fort Hills oil sands mining project, to Suncor Energy Inc.
Aside from the Fort Hills asset, the acquisition also includes associated midstream commitments. The consideration for the transaction is around $1.1 billion (CAD 1.47 billion) and has an effective date of April 1, TotalEnergies and Suncor said in separate news releases Monday. Including adjustments, TotalEnergies said it received a cash payment of roughly $1.3 billion (CAD 1.83 billion) at closing.
Suncor now owns 100 percent of the Fort Hills Project, which it operates. The project is an open-pit truck and shovel mine located in Alberta’s Athabasca region, 56 miles (90 kilometers) north of Fort McMurray. The acquisition adds 61,000 barrels per day (bpd) of net bitumen production capacity and 675 million barrels of proved and probable reserves to Suncor’s existing oil sands portfolio, the company said in an earlier news release announcing the acquisition.
Along with its 100 percent ownership of Firebag and MacKay River in-situ assets, the acquisition provides Suncor with additional long-life, physically-integrated bitumen supply to maximize the utilization of its wholly-owned Base Plant upgraders post the end of the Base Mine life. Suncor’s Base Plant operation includes two mines and extraction operations north of Fort McMurray, in the Regional Municipality of Wood Buffalo.
In October, TotalEnergies completed the sale of its 50 percent participation in the Surmont oil sands project and associated midstream commitments to ConocoPhillips. TotalEnergies received approximately $2.75 billion in cash (CAD 3.7 billion) after closing adjustments, as well as future contingent payments of up to approximately $0.33 billion (CAD 0.44 billion).
ConocoPhillips owns 100 percent of Surmont and is continuing as the asset’s operator. Surmont is located in the Athabasca region of northeastern Alberta, approximately 35 miles south of Fort McMurray. According to the company website, Surmont’s net production reached 69 million barrels of oil equivalent in 2011.
“With these two divestments over the last couple of months, TotalEnergies effectively exits the Canadian oil sands, focusing our allocation of capital to Oil & Gas assets with low breakeven”, TotalEnergies Chief Financial Officer Jean-Pierre Sbraire said. “The company has hence received more than US$4 billion from these sales during the fourth quarter 2023, out of which, as previously announced, US$1.5 billion will be shared with shareholders as buybacks in 2023”.
Gas Power Plant Acquisitions
Meanwhile, TotalEnergies signed an agreement to acquire three gas-fired power plants with a total capacity of 1.5 gigawatts (GW) in Texas for $635 million from TexGen. The three plants are connected to the Electric Reliability Council of Texas (ERCOT), the second largest power market in the USA, according to a separate news release. The transaction remains subject to approval by the relevant authorities.
The acquisition is for the Wolf Hollow I plant, with a 745-megawatt (MW) combined-cycle gas turbine (CCGT) plant on the outskirts of Dallas; the Colorado Bend I plant with a 530-MW CCGT and a 74 MW open-cycle gas turbine (OCGT) south of Houston; and the La Porte site with a 150-MW OCGT, southeast of Houston.
The 1.5 GW additional flexible production capacity will complement the company’s renewable capacity in Texas, which currently has 2 GW gross installed, 2 GW under construction and more than 3 GW under development, TotalEnergies said, adding that the acquisition would strengthen its trading capabilities in the gas and power markets.
“We are delighted with the agreement signed with TexGen to acquire 1.5 GW of CCGT in ERCOT. After the signing of several corporate PPA over the last couple of years and the recent start-up of the utility-scale Myrtle solar plant, this deal is a major milestone for our Integrated Power strategy in the ERCOT market”, TotalEnergies President for Gas, Renewables and Power Stephane Michel said. “These plants will enable us to complement our renewable assets, intermittent by nature, provide our customers with firm power, and take advantage of the volatility of electricity prices”.
