CALGARY—TransAlta has announced an agreement with Suncor Energy to restructure its current arrangement for the power generation services of its oil sands base site near Fort McMurray and to acquire Suncor’s interest in two wind projects located in Alberta and Ontario.
TransAlta’s Poplar Creek co-generation facility, which has a maximum capability of 376 megawatts, had been built and contracted to provide steam and electricity to Suncor until 2023. Under the terms of the new arrangement, Suncor will acquire from TransAlta two steam turbines with an installed capacity of 132 megawatts and certain transmission interconnection assets. In addition, Suncor will assume full operational control of the co-generation facility and have the right to use the full 244 megawatts capacity of TransAlta’s gas generators until 2030. TransAlta will provide Suncor with centralized monitoring, diagnostics and technical support to maximize performance and reliability of plant equipment. Ownership of the entire Poplar Creek co-generation facility will also transfer to Suncor in 2030.
As part of the transaction, TransAlta will acquire Suncor’s interest in two wind farms: the 20 megawatt Kent Breeze facility located in Ontario and Suncor’s 51 per cent interest in the 88 megatwatt Wintering Hills facility located in Alberta.
TransAlta said the deal will provide the company higher value by increasing the duration of the contract and add high quality renewable assets to the company’s wind fleet.
Suncor added that once the transaction has closed, Suncor’s renewable energy portfolio will include five operational wind power projects, one project in development and Canada’s largest ethanol production facility.
The restructuring transaction is subject to the satisfaction of a number of customary conditions and the receipt of regulatory approval. The transaction is expected to close in the third quarter of 2015.