Suncor Energy is divesting a one-third stake in an oil-storage terminal in northern Alberta, Canada, to the Fort McKay First Nation.

Fort McKay First Nation is paying $350m for a 34.3% interest in its East Tank Farm, which is under construction north of Fort McMurray.

The facility will include bitumen storage, blending and cooling facilities and connectivity to third party pipelines.

The farm will process crude oil from Suncor’s Fort Hills mine, which will add about 180,000 barrels per day in new capacity starting next year.

It is anticipated to be operational in the second quarter of 2017. The transaction is subject to several conditions including negotiation of definitive documentation, Fort McKay First Nation obtaining the necessary finance, due diligence and such other conditions that are customary for acquisition transactions.

Suncor Energy will continue to operate the facility. Revenue from long-term terminaling service agreements with Fort Hills partners can underpin Fort McKay First Nation’s independent financing ability.

Fort McKay First Nation chief Jim Boucher said: "This deal clearly shows industry that our people are integral players in business and we have the ability and means to build strong relationships. We believe our investment in this project demonstrates our support of Suncor's continued willingness to forge a long-term business relationship.

"Fort McKay First Nation has been engaged in the oilsands business for over 30 years and we have the ability to build and maintain sustainable relationships with our neighbours. The investment we make today is an investment that will endure for the long-term benefit of our community."