Gibson Energy says they will be able to increase production at its Moose Jaw oil refinery from 17,000 barrels to 22,000 a day without increasing emissions.
The facility added new equipment that essentially recycles heat generated in the refining process, meaning production is more fuel efficient.
Without the facility upgrade, Lindsay says emission likely would have increased at the refinery by 20 to 25 per cent at their new production output.
The company is the first to use Saskatchewan’s Oil and Gas Processing Investment Incentive (OGPII), which was introduced in 2017. The provincial government says this incentive can help achieve goals laid out in their climate change strategy, Prairie Resilience.
OGPII offers energy companies a 15 per cent royalty credit on the cost of a project. In this case, Gibson spent about $20 million, so their credit works out to a $2.5 to $3 million reduction in resource royalties they would have to pay to the province over the next three years.
The credit caps at $75 million per project or $300 million per program.
“Most notably, with that increase in production comes no increase in the greenhouse gas emissions. We are taking carbon out of a barrel of oil here in Saskatchewan,” Premier Scott Moe said.
Moe added the 15 per cent credit amount was reached through consultation with industry, saying they’ve had a “rough ride” in recent years.
The refinery modifications created about 40 new jobs in Moose Jaw, an investment Mayor Fraser Tolmie is happy to see in the Friendly City.
“The investment in this particular plant increases production, which goes beyond our borders but it also increases the amount of crude oil producers are going to be able to ship out,” Tolmie said.
The refinery’s expansion came online on June 29, 2019. Lindsay said work is still ongoing, as crews remove some old infrastructure.
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