First in-service pipeline project complete under Sask. oil infrastructure investment program

The Government of Saskatchewan announced Wednesday the first completed, in-service pipeline project under the provincial oil infrastructure investment program (OIIP). Provided / Government of Saskatchewan

The Saskatchewan government announced Wednesday the province’s first in-service pipeline project under its oil infrastructure investment program (OIIP) has been completed.

The Husky Midstream’s Saskatchewan Gathering System Expansion near Spruce Lake consists of 62 kilometres of new pipeline and 12 kilometres of replacement pipe.

It will accommodate a new shipping capacity of up to 48,000 barrels per day of crude oil production supporting growth and broader access to export markets. The project cost $82 million and created about 450 construction-related jobs at its peak.

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“Our government will continue supporting the development of oil infrastructure in our province to create long-term sustainable growth for our energy industry,” Saskatchewan Premier Scott Moe said.

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“This project is a step toward meeting our Growth Plan targets to increase oil production by 25 per cent to 600,000 barrels per day by 2030.”

Saskatchewan’s ministry of energy and resources first introduced OIIP in 2020, offering transferable oil and gas royalty/freehold production tax credits, at a rate of 20 per cent of eligible costs, for qualified projects that significantly increase provincial pipeline capacity.

“We want to foster greater energy independence in Saskatchewan, particularly in light of the federal government’s anti-energy policies and cancellation of major pipeline projects in recent years,” said Bronwyn Eyre, Saskatchewan’s energy and resources minister.

“This pipeline expansion will increase Saskatchewan’s producers’ access to processing and export infrastructure, support growth and decrease trucking volumes on our highways.”

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The Husky Midstream project is expected to help alleviate record-level demand for rail and truck transportation for oil while reducing emissions and transportation costs for the energy sector.

“The Oil Infrastructure Investment Program helps attract investment to the province, especially in times where economic uncertainty means companies are re-evaluating their capital spending,” said Duane Rae, Husky Midstream CEO.

“It will help companies like ours invest in new transportation infrastructure that supports customers developing new production opportunities.”

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The province said increased pipeline capacity could also generate increased royalties and revenues for the government.

Saskatchewan is accepting applications under the OIIP program until March 31, 2025.

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