French TotalEnergies will buy an additional stake in the Fort Hills oil sands mine in western Canada from Teck Resources, the two companies said, giving partner Suncor Energy a smaller-than-expected stake in the project.

Suncor announced a deal in October to buy Teck’s 21.3% stake in the Fort Hills oil sands mine in northern Alberta, but in December the French company TotalEnergies filed an action in Alberta court challenging the settlement.

Now TotalEnergies has said it will exercise its right of first refusal and buy an additional 6.65% of Teck’s stake for C$312 million ($234 million) on the same terms as Suncor’s deal with Teck.

“We continue to expect the sale of our entire stake in Fort Hills to be completed in the first quarter”said Chris Stanell, a spokesperson for Teck.

Fort Hills is a 194,000 barrel per day (bpd) truck and shovel surface mine where bitumen is mined raw tar sands (also called tar sands) which are then shipped to upgraders. The project encountered operational difficulties that delayed the ramp-up of production and increased costs.

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In December, TotalEnergies filed a lawsuit in Alberta King’s Court challenging the validity of the pre-emption notice it had received from Teck. According to Teck, TotalEnergies was unsuccessful on appeal.

The deal means operator Suncor will expand its majority stake to just under 69% of Fort Hills, down from the planned 75.4%.

“The Fort Hills partners have the right of first refusal and Total is exercising its right to acquire a pro rata share,” said Sneh Seetal, a Suncor spokesperson. “We will acquire the remainder as originally planned.”

TotalEnergies intends to separate its oil sands operations as this activity does not align with its future low emissions targets.

TotalEnergies, which also owns a 50% stake in the Surmont oil sands project, said last year it wanted to divest its Canadian oil sands operations because the assets do not fit its low-emissions strategy.

Shareholders will vote on the spin-off plan at TotalEnergies’ annual general meeting in May.

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The purchase of an additional stake in Fort Hills brings the company’s total interest in the project to 31.23%.

Jonah Resnick, an analyst at energy consultancy Wood Mackenzie, says: “Total didn’t want Suncor to get the asset for nothing.”

“For Total, the increase in its overall stake means that it has something more to contribute to the new entity it is spinning off.”

“By seizing this opportunity to do business on attractive terms, TotalEnergies EP Canada will bring value to future shareholders of the spin-off entity”Jean-Pierre Sbraire, chief financial officer of TotalEnergies, said in a statement.

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