Oil and Gas Processing Investment Incentive
SK, Canada
Tax credit for oil and gas production in Saskatchewan
grant_single_labels|summary
grant_single|eligibleFinancing
- grant_single|fromMinToMax
- grant_single|projectCostPercent
grant_single|deadlines
- grant_single|openingDateJuly 08, 2019
- grant_single|closingDateMarch 31, 2029
grant_single|financingType
Tax Credits
grant_single|eligibleIndustries
- Mining, quarrying, and oil and gas extraction
- Utilities
- Manufacturing
grant_single|grantors
- Government of Saskatchewan
grant_single|status
grant_card_status|open
grant_single_labels|preview
Get a transferable production tax credit of 15% to offset the costs of qualified greenfield or brownfield value-added projects.
grant_single_labels|projects
This grant is offered within the context of the Government of Saskatchewan. However, specific geographical eligibility for companies beyond the province is not specified within the given context.
grant_single|admissibleProjectsExample
$750,000
Regina
Establishment of a lithium extraction facility from oilfield water
$750,000
Yorkton
Development of a regional gas gathering project to optimize resource use
$750,000
Saskatoon
Development of a methanol production facility to utilize Saskatchewan's natural gas resources
$750,000
Weyburn
Construction of an ammonia production facility to benefit the local fertilizer industry
$750,000
Moose Jaw
Establishment of a carbon capture facility to enhance oil recovery
$750,000
Prince Albert
Construction of a helium liquefaction facility to commercialize helium gas
grant_single_labels|admissibility
Eligibility for the Oil and Gas Processing Investment Incentive (OGPII) grant requires meeting specific criteria related to activities, project impact, and investment level.
- All activities must add or create value by processing, transforming, and/or upgrading upstream oil, gas, helium, and lithium industry products, commercializing these up- and waste products, or enhancing value-added chemical fertilizer production.
- The project must lead to a significant increase in processing capacity within Saskatchewan's oil, gas, helium, lithium, or chemical fertilizer industries.
- The eligible project must involve a minimum investment of CAD$10 million in applicable costs.
grant_eligibility_criteria|who_can_apply
Eligible applicants for the OGPII program include value-added projects across all segments of Saskatchewan's oil, gas, helium, and lithium sectors, as well as chemical fertilizer facilities. Projects must involve new (greenfield) facilities or expansions (brownfield) of existing facilities that significantly increase processing capacity in these industries.
grant_eligibility_criteria|eligible_expenses
The OGPII grant supports developments in Saskatchewan's oil, gas, helium, and lithium sectors to enhance value addition, sustainability, and commercialization of byproducts. Eligible projects are encouraged to advance processing capacity and innovation within these industries.
- Refinery and upgrading facilities such as partial upgraders and asphalt production.
- Petrochemical facilities producing chemicals such as methanol and polypropylene.
- Projects focusing on the commercialization of waste gas by converting it to power.
- Development of regional gas gathering projects and multiphase ventures.
- Helium processing and liquefaction facilities to enhance this sector.
- Carbon capture, utilization, and storage for oil recovery enhancement.
- Extraction of lithium from produced oilfield water as a byproduct.
- Establishment of chemical fertilizer production facilities.
- Projects that expand existing facilities (brownfield) or create new ones (greenfield).
grant_eligibility_criteria|zone
Eligible expenses for the OGPII grant include various costs necessary for developing and enhancing value-added processing capacity in the oil, gas, helium, lithium, and chemical fertilizer sectors.
- Investment in new (greenfield) facilities or expansions (brownfield) of existing facilities.
- Costs associated with enabling infrastructure required to bring the project into operation.
- Commercialization costs of upstream oil and gas production byproducts and waste products.
grant_single_labels|criteria
Yes, there are evaluation and selection criteria for the Oil and Gas Processing Investment Incentive (OGPII). Applicants must meet specific eligibility requirements and be assessed by the Ministry of Energy and Resources to receive conditional approval and subsequently qualify for royalty credits.
- The eligible activity must add or create value by processing, transforming, and/or upgrading upstream oil, gas, helium, and lithium industry products.
- Eligible projects can include new (greenfield) facilities, expansions (brownfield) of existing facilities, and all enabling infrastructure required to bring the project into operation.
- The project must result in a significant increase in processing capacity in Saskatchewan's oil, gas, helium, lithium, or chemical fertilizer industry as determined by the minister.
- The project must involve a minimum investment of CAD$10 million in eligible costs.
- The project must not have become operational before the eligible project application is submitted.
grant_single_labels|register
- Step 1: Obtain Application Documents
- Download the "OGPII Program Overview and Application Instructions" to understand the details of the application process.
- Obtain the "OGPII Application Form" to begin your application preparation.
- Step 2: Prepare Application
- Complete the OGPII Application Form with detailed and accurate information about the proposed project.
- Ensure all project-specific information and eligible costs are accounted for in the application form.
- Step 3: Submit Application
- Submit the completed OGPII Application Form to the Ministry of Energy and Resources via email at ogpii@gov.sk.ca.
- Ensure the submission is done during the application acceptance period, which is from 8:00 a.m. (CST) on July 8, 2019, to March 31, 2029.
- Step 4: Follow Up
- If there are any questions or further clarification needed, contact the Ministry of Energy and Resources at ogpii@gov.sk.ca.
grant_single_labels|otherInfo
The OGPII program involves detailed regulatory procedures and specific requirements that must be met by applicants.
- Program launched in June 2019 and applications accepted until March 31, 2029.
- Program provides transferable royalty and production tax credits equal to 15% of approved eligible costs.
- Eligible costs must involve a minimum investment of CAD$10 million.
- Credits can be claimed at a rate of 20% in Year 1, 30% in Year 2, and 50% in Year 3.
- Credits are automatically applied against crown royalties and freehold production taxes in Saskatchewan or transferable to other corporate entities with an IRIS BA ID.
- Unused credits expire on March 31, 2040, or as per the date set in the agreement.
- Examples of value-added processing activities include gas gathering systems, oil refineries, upgraders, gas processing plants, and carbon capture projects.
- Non-eligible activities include oil pipelines or rail loading facilities not connected to an eligible value-added project and gas gathering infrastructure with routine flaring.
- Additional information and contact can be done through ogpii@gov.sk.ca.
grant_single_labels|contact
ogpii@gov.sk.ca
Apply to this program
Oil and Gas Processing Investment Incentive in Saskatchewan
The Oil and Gas Processing Investment Incentive (OGPII) provides financial credits to support the development and expansion of oil, gas, helium, lithium, and chemical fertilizer projects in Saskatchewan, Canada. This initiative offers substantial benefits to both producers and non-producers within the industry, fostering a collaborative environment for economic growth.
Key Features and Advantages of the OGPII Program
The Oil and Gas Processing Investment Incentive (OGPII) was designed by the Government of Saskatchewan to significantly boost the province's processing capacity in key resource sectors, including oil, gas, helium, lithium, and chemical fertilizers. As part of the program's recent extension announced in the Budget 2024-25, the OGPII will be accepting project applications until March 31, 2029, providing a long-term opportunity for investors and companies to access financial support through a transferable Crown royalty and freehold production tax credits regime. This incentive is targeted at both greenfield and brownfield projects, ensuring new developments and expansions of existing facilities can benefit.
The OGPII offers a generous funding cap which has been increased to $500 million, shared with the Critical Minerals Processing Investment Incentive. With a project-specific credit cap set at CAD$75 million for oil, gas, helium, and lithium ventures, and CAD$70 million for chemical fertilizer initiatives, OGPII accommodates a variety of large-scale projects that are poised to create significant economic contributions. Beneficiaries of the program can transfer credits to other entities in the sector, allowing for shared financial advantages and broad collaboration opportunities.
The incentive structure is particularly accommodating as credits can be claimed over three years at ascending rates: 20% of credits in the first year, 30% in the second, and 50% in the final year. This staged approach helps project developers manage their cash flow while completing and ramping up operations. Projects spanning multiple companies can also leverage this incentive, making it an attractive option for joint ventures striving towards collective goals in resource processing.
To be eligible for OGPII, projects must demonstrate a significant increase in the processing capacity within Saskatchewan's industries and make a minimum investment of CAD$10 million. This eligibility criterion not only focuses on enhancing the local operational capacity but also encourages substantial investments, fostering economic growth and job creation in the province.
OGPII is fully compatible with other grants and incentive programs available in Saskatchewan, boosting its appeal to a wide range of potential applicants. This compatibility ensures that companies can maximize funding opportunities, aggregating various sources of financial support to drive their initiatives forward.
Administrated by the Ministry of Energy and Resources, OGPII is embedded in Saskatchewan's broader economic strategy to innovate within the energy sector while contributing to the sustainability and competitiveness of its natural resources industries. By facilitating value-added processing, commercialization of byproducts, and reduction of waste, this grant aligns with Saskatchewan's vision for a green transition and economic resilience.
With the ongoing global focus on energy transition and sustainability, initiatives like the OGPII are crucial for preparing industries for future challenges while tapping into emerging opportunities. Companies involved in technologies such as carbon capture and gas commercialization will particularly benefit from this robust financial support framework.
Additionally, the OGPII plays a crucial role in supporting the region's burgeoning helium and lithium sectors until their eligibility is transferred to the new Critical Minerals Processing Investment Incentive. By strengthening these modern mineral industries, Saskatchewan positions itself as a pivotal player in critical mineral processing, aligning with national and international objectives for mineral security and sustainability.
Through the strategic allocation of tax credits, the OGPII not only contributes to the immediate strengthening of regional industries but also lays a foundation for sustainable, long-term economic vitality in Saskatchewan. Eligible entities seeking to bolster their projects with OGPII's support have until March 31, 2029, to submit their applications, opening up pathways to innovation and development in some of Canada’s most promising sectors.
Overall, the OGPII embodies a forward-thinking approach to resource development, offering substantial support to industries dedicated to adding value, enhancing capacity, and fostering a more resilient Saskatchewan economy.
