EDMONTON -- Suncor has received provincial approval to build a 40,000-barrel-per-day oilsands bitumen facility south of Fort McMurray, the Alberta government announced Wednesday.

The Meadow Creek West project will now move on to the next stage of development as Suncor firms up its final investment decision and applies for environmental licences and development permits.

The facility will extract heavy bitumen using steam-assisted gravity drainage, which uses steam to heat bitumen so it can be pumped to the surface.

The government estimates it will create up to 3,200 jobs during construction and 200 jobs once it's operational.

"Enabling projects like Meadow Creek West demonstrates our commitment to encouraging investment and creating good-paying jobs in our province," Energy Minister Sonya Savage said in a statement.

Along with Meadow Creek East, the two projects are expected to have a combined output of 120,000 barrels per day.

The plans had to pass approval from the Alberta Energy Regulator before they were submitted for government approval.