CALGARY -- Suncor Energy Inc. will be able to revive its stalled $20.6-billion expansion plans sooner than anticipated should its proposed union with Petro-Canada proceed.

Construction at Suncor’s third upgrader, as well as its Firebag in-situ oil sands expansion project -- that is about 40% complete -- was halted in January, but Petro-Canada’s stronger balance sheet and healthy cash flow from its conventional assets could be used to get the building back on track.

"We expect to get back at that construction sooner" than planned, said Rick George, Suncor’s chief executive, in an editorial board meeting with the National Post. He did not give a timeline, and when plans were iced in January, Suncor did not say how long it would take before the construction freeze would melt.

"We’re going to be able to invest capital back, particularly in the oil sands business so we get back to work on these construction projects," Mr. George said.

Firebag needs another $1-billion investment and then it will be capable of producing 68,000 barrels of oil a day that would be "economic at [today’s] price," Mr. George said.

Suncor’s aspirations of pouring money back into its expansion projects were met with mixed reviews Tuesday. On one hand, investors argue there is no point in putting billions of dollars on the line if commodity prices stay weak. On the other hand, Suncor has billions of dollars tied up in projects that are partially complete, and it won’t see returns until those efforts are complete, said Jill MacRae, a fund manager at J.Zechner Associates Inc.

Suncor and Petro-Canada unfurled a surprise merger agreement Monday, offering Petro-Canada shareholders 1.28 Suncor shares for every Petro-Canada share they hold. Both companies need 66% of their shareholders to approve the deal, which the integrated energy companies hope to complete by the third quarter of 2009.

Suncor and Petro-Canada have to clear a number of regulatory hurdles. The pair will lobby the government to kill the Petro-Canada Public Participation Act, which says no one party can own more than 20% of Petro-Canada, which they believe would apply to the merged company. While Suncor and the former Crown corporation want this legislation lifted, it is not a condition of their union.

Competition concerns will also have to be addressed. As a result, Sunoco gas stations will disappear in Ontario -- at least in name -- should the proposed merger go through.

They will be rebranded to bear the patriotic Petro-Canada logo, and some of the Sunoco stations will likely be sold as the merged company works to satisfy competition concerns.

"The Sunoco brand will not be present," predicted Mr. George, who will lead the merged Suncor. The shift will not be immediate, and will be subject to discussions with the Competition Bureau, he noted. "There will be a divestment."

Petro-Canada and Suncor have placed their own unusual conditions on the deal -- one that stipulates the debt of new company must be rated as investment grade.

The long term senior unsecured and unsubordinated debt of the new Suncor "shall have a prospective long-term issuer credit rating of 'Baa3 or better by Moody’s Investor Services or 'BBB-' or better by Standard & Poor’s," according to the merger agreement released late Monday.

Moody’s put Suncor’s current 'Baa1' under review for a possible downgrade Monday after the proposed merger was announced. S&P currently rates Suncor at 'BBB+.' S&P placed Suncor on 'CreditWatch,' but did not indicate whether the implications would be positive or negative.

Petro-Canada is currently rated at 'Baa2' Moody’s, and 'BBB' by S&P. That rating agency on Monday put Petro-Canada’s debt on 'CreditWatch with positive implications.'