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Oil sands junior going to market
Synenco Energy, an oil sands start-up, has filed a preliminary prospectus with regulators to help finance its 60 percent share of the Northern Lights project in Alberta.
The company plans to spend C$250 million on advance work and deposits on long lead-time equipment orders, although Synenco is expected to need about C$3.2 billion for the C$5.3 billion mining, bitumen extraction and upgrading operation that is being designed to produce 100,000 barrels per day of synthetic crude, starting at 50,000 bpd in 2010. Final price tag could grow However, Synenco has cautioned that the final price tag could grow by as much as 30 percent to C$6.9 billion.
The plans call for a gasification unit intended to lower the need for natural gas and make Northern Lights “virtually energy self-sufficient.”
China’s state-owned Sinopec, the world’s seventh largest oil company, purchased a 40 percent stake for C$105 million earlier this year through its Canadian subsidiary, SincoCanada Petroleum.
Sinopec is looking for a site near Edmonton as it weighs the possibility of building an upgrader there rather than on the mine site.
A regulatory application is scheduled to be filed by mid-2006.
Half of Synenco’s financing will likely be raised through debt and half through equity.
A private offering of 4.3 million Synenco shares at C$14 each in August give Synenco a value entering the IPO of about C$400 million.
—Gary Park
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