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Fort Hills oilsands project achieves first oil production

FILE: A sign directing traffic to the Suncor Energy Inc. base plant stands at the Athabasca Oil Sands near Fort McMurray, Alberta, Canada, on Tuesday, March 26, 2013.
FILE: A sign directing traffic to the Suncor Energy Inc. base plant stands at the Athabasca Oil Sands near Fort McMurray, Alberta, Canada, on Tuesday, March 26, 2013. Brett Gundlock/Bloomberg via Getty Images

The Fort Hills oilsands project has achieved its first oil production and will continue to ramp up through the first quarter.

Suncor Energy Inc., the project operator, says Fort Hills remains on track to reach 90 per cent capacity by the end of 2018.

With a maximum capacity of 194,000 barrels per day, Fort Hills is one of the biggest oilsands projects, accounting for nearly 10 per cent of current oilsands production.

Suncor holds a 53.06 per cent interest in the project, while Total E&P Canada Ltd. owns 26.05 per cent. Teck Resources Ltd. holds the remaining 20.89 per cent.

READ MORE: Fort Hills partners settle funding dispute, Total reduces stake in project

Construction of Fort Hills was green-lit in 2013, after the project was shelved for five years due to the 2008 financial crisis.

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The last part of the plant to be commissioned was the “secondary extraction” facility, which processes bitumen froth into bitumen.

That process took longer than expected, leading to a longer-than-first-planned-for work stoppage. Dozens of contractors spoke out last week, claiming they were being forced to stick around until the work was complete without being paid. They were later compensated for their time.

READ MORE: Oilsands workers to be paid for work stoppage after solvent introduced at Fort Hills mine

Fort Hills was expected to begin producing bitumen by the end of 2017, but Suncor said it would miss that target by two or three weeks. Once fully operational, Suncor’s Fort Hills mine is expected to generate 1,600 jobs and have a lifespan of 50 years.

Last year, Suncor said delays caused by the Fort McMurray wildfire in 2016, along with construction changes to boost capacity, had added from $1.4 billion to $1.9 billion to Fort Hills’ estimated cost, taking it to between $16.5 billion and $17 billion.

Suncor’s Fort Hills mine is about 90 kilometres north of Fort McMurray in the remote, northern Alberta wilderness.

— With files from Karen Bartko, Global News