Oil and Gas Processing Investment Incentive (OGPII)
The Oil and Gas Processing Investment Incentive (OGPII) offers transferable crown royalty and freehold production tax credits for qualified greenfield or brownfield value-added projects at a rate of 15 per cent of eligible program costs.
Offered by Ministry of Energy and Resources
Amount
Transferable crown royalty and freehold production tax credits at a rate of 15 per cent of eligible program costs, with a project-specific awarded credit cap of CAD$75 million
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Who can apply
OGPII is open to value-added projects across all segments of Saskatchewan’s oil and gas sector as well as chemical fertilizer facilities. Eligible projects include:
- Refineries/upgrading facilities (i.e., partial upgraders, asphalt production, and sulphur removal units);
- Petrochemical facilities (i.e., methanol, ammonia, polypropylene, olefins, and ethylene);
- Associated gas commercialization projects (i.e., processing facilities, waste-gas-to-power etc.);
- Regional gas gathering projects and projects with multiple phases may also be considered under a single project application;
- Carbon capture, utilization and storage for enhanced oil recovery;
- Commercialization of oil and gas production byproducts and waste products; and,
- Chemical fertilizer facilities;
- Eligible Activity – all activities which add or create value by processing, transforming, and/or upgrading upstream oil, gas or associated gas products, by commercializing upstream oil and gas production byproducts and waste products, or by increasing value-added chemical fertilizer production may be considered eligible. Eligible projects can include new (greenfield) facilities, expansions (brownfield) of existing facilities and all enabling infrastructure required to bring the project into operation.
- Increase in Processing Capacity – the Ministry of Energy and Resources must be satisfied that the project results in a significant increase in processing capacity in Saskatchewan’s oil, gas or chemical fertilizer industry.
- Eligible Costs – the eligible project must involve a minimum investment of CAD$10 million in eligible costs.
About the funding
OGPII also received a funding cap increase from $370 million to $500 million over the life of the program. This funding cap will be shared by OGPII and the newly announced Critical Minerals Processing Investment Incentive (CMPII).
The Oil and Gas Processing Investment Incentive (OGPII) offers transferable crown royalty and freehold production tax credits for qualified greenfield or brownfield value-added projects at a rate of 15 per cent of eligible program costs.
- The royalty credits are fully transferable which gives non-producers/non-royalty payers an opportunity to benefit from the program, because they have the ability to transfer credits to oil, gas and helium crown royalty and freehold production taxpayers. Also, OGPII encourages multi-company projects as costs can be incurred by a firm other than the principal applicant.
- OGPII has a project-specific awarded credit cap of CAD$75 million.
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- Credits can be claimed at a rate of 20 per cent of total credits in the first calendar year of operations, 30 per cent in the second calendar year, and 50 per cent in the third calendar year.
- OGPII can be used alongside other incentive and grant programs available in Saskatchewan.
Similar programs
| Program | Type | Amount | Status |
|---|---|---|---|
| Oil Infrastructure Investment Program (OIIP) | Tax Credit | Transferable Crown royalty and freehold production tax credits at a rate of 20 per cent of eligible project costs, with a project-specific awarded credit cap of CAD$40 million (i.e., a maximum of up to CAD$200 million in recognized eligible costs per project) | Open |
| Corporation Income Tax Rebate for Primary Steel Production | Rebate, Tax Credit | 100% of the incremental Saskatchewan Corporation Income Tax for each of the first two years, 75% for the third year, 50% for the fourth year and 25% for the fifth year of a five-year rebate period | Open |
| Saskatchewan Chemical Fertilizer Incentive (SCFI) | Tax Credit | Non-refundable, non-transferable 15 per cent tax credit on capital expenditures of $10 million or more for newly constructed or expanded eligible chemical fertilizer production facilities, claimed over a 10-year period | Open |
| Saskatchewan Petroleum Innovation Incentive (SPII) | Tax Credit | Transferable Crown royalty and freehold production tax credits at a rate of 25 per cent of eligible project costs, with a project-specific awarded credit cap of CAD$5 million (i.e., a maximum of up to CAD$20 million in recognized eligible costs per project) | Open |
