* Suncor to take C$140 mln charge on Q1 earnings
* Several analysts predicted plant would be scrapped
* Pays Total C$515 mln for upgrader partnership stake
CALGARY, Alberta, March 27 (Reuters) - Suncor Energy Inc said on Wednesday it scrapped its long-delayed and partially built Voyageur oil sands upgrading plant in northern Alberta as competition in the North Dakota Bakken region cut potential returns from the multibillion-dollar venture.
Suncor, Canada's largest oil company, said the decision to pull the plug on Voyageur seven years after it was first approved will allow it to redirect capital to higher-return projects and possibly boost dividends and share buybacks.
It began re-evaluating the prospects last year for the complex plant, designed to "upgrade" bitumen from several oil sands projects into refinery-ready light crude.
The company had cited surging volumes of cheaper crude from the North Dakota Bakken region, which has similar characteristics with the upgraded bitumen, for the declining potential. The move shows how the change in North American oil flows is forcing shifts in how the industry allocates its capital.
"Since 2010, market conditions have changed significantly, challenging the economics of the Voyageur upgrader project," Suncor Chief Executive Steve Williams said in a statement.
Analysts have also said the project was pressured by rising labor costs, adding that investors welcomed the prospect of cancellation.
The 200,000 barrel-per-day upgrader was part of a larger oil sands partnership with France's Total SA that also includes the proposed Fort Hills and Joslyn oil sands mines in northern Alberta. Suncor had started construction, but work was halted during the financial crisis in 2008-2009.
Suncor said it will take charges of C$140 million ($134 million) to earnings and C$180 million to cash flow in the first quarter as a result of the decision.
Suncor also said it bought Total SA's interest in the upgrader partnership for C$515 million to gain full control of the assets.
The partnership's other assets include a housing facility, a storage tank farm, a heated bitumen terminal and other facilities, Suncor spokeswoman Sneh Seetal said.
An official with Total said the company's Canadian chief will comment on the impact of the decision on Thursday.
Shares in Suncor finished down 33 Canadian cents at C$30.40 on the Toronto Stock Exchange. The company announced the cancellation of the project after the market closed.