Premier Kathy Dunderdale announced that a third module for the Hebron oil project will not be built in Newfoundland and the provincial government will collect $150 million in compensation.
In June, officials with ExxonMobil said building the disputed module in the province would push back first oil for Hebron. But the premier said there was capacity for the work to be done at its Bull Arm facility, and sending the work elsewhere was "absolutely unacceptable."
A release from the provincial government said Thursday that following mediation both parties settled on compensation concerning the in-province fabrication. Dunderdale said the $150-million payment is equal to the value of the third module.
Dunderdale said the payment will be put towards a new science building at Memorial University, two cancer operating rooms at the Bliss Murphy Cancer Centre in St. John's, and an extension to the long-term care facility in Happy Valley-Goose Bay.
Dunderdale said planning for the projects will start immediately, but work on the projects won't begin until 2016.
In 2008, the company and the province reached a memorandum of understanding that included a provision to address disputes over in-province fabrication.
The province will receive the money on June 30, 2016.