Suncor Greenlights Terra Nova Asset Life Extension
Suncor has announced that the co-owners of the Terra Nova Floating, Production, Storage and Offloading (FPSO) facility, and associated Terra Nova field, have finalized an agreement to restructure the project ownership and move forward with an asset life extension development.
Suncor, Cenovus and Murphy Oil now control 100 percent of the project, with Suncor holding a 48 percent stake, previously approximately 38 percent, Cenovus holding a 34 percent interest, previously 13 percent, and Murphy Oil holding the remaining 18 percent interest, previously approximately 10 percent.
The agreement also includes previously disclosed royalty and financial support from the Government of Newfoundland and Labrador, including up to $161.4 million (C$205 million), on a matching contribution basis, to support local onshore and offshore work related to the development, Suncor highlighted.
The asset life extension project is expected to extend production life by approximately 10 years, providing an additional 70 million barrels of resource for the partnership, Suncor noted. As part of the project, the FPSO will undergo maintenance work at the Bull Arm Fabrication site starting early September prior to sailing to dry dock in Ferrol, Spain, later this year with a return to operations anticipated before the end of 2022.
“The decision to move forward with the Terra Nova project is a concrete example of Suncor’s commitment to invest in projects that have strong economic returns and will provide long-term value for investors,” Mark Little, Suncor’s president and chief executive officer, said in a company statement.
“This agreement also provides certainty for the 1,000 plus local direct and indirect jobs that support the project … We appreciate the deep collaboration and support from the provincial and federal governments, which has been crucial to helping us reach this important milestone,” he added.
Alex Pourbaix, Cenovus’ president and chief executive officer, said, “sanctioning the Terra Nova asset life extension provides a superior value proposition for our shareholders compared with the alternative of abandoning and decommissioning the project”.
The Terra Nova field is located offshore approximately 217 miles southeast of Newfoundland and Labrador. It was discovered in 1984 and production from the field began in 2002, using the Terra Nova FPSO, which Suncor highlights is one of the largest FPSO vessels ever built at 958 feet long and 149 feet wide.
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