Lloydminster-based Husky Midstream has completed the first in-service pipeline project under the provincial government’s oil infrastructure investment program (OIIP), an initiative that will help alleviate problems shipping oil and gas to market.
Husky’s Saskatchewan Gathering System Expansion project will accommodate new shipping capacity of up to 48,000 barrels of oil per day of crude oil production, with 62 kilometres of new pipeline and 12 kilometres of replacement pipe. The $82-million investment near Spruce Lake will support oil production growth and broader access to export markets.
The project also created about 450 construction-related jobs at its peak.
“Our government will continue supporting the development of oil infrastructure in our province to create long-term sustainable growth for our energy industry,” Premier Scott Moe said. “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.”
The OIIP, first which the Ministry of Energy and Resources first introduced in 2020, offers 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, minister responsible for energy and resources. “This pipeline expansion will increase Saskatchewan producers’ access to processing and export infrastructure, support growth and decrease trucking volumes on our highways.”
The Oil Infrastructure Investment Program attracts investment to the province, especially when economic uncertainty means companies are re-evaluating their capital spending, Husky Midstream CEO Duane Rae said. OIIP will also help companies such as his invest in new transportation infrastructure that supports customers developing new production opportunities.
Husky Midstream’s project, as well as other anticipated new and expanded pipeline infrastructure, will help alleviate record-level demand for oil by rail and truck transportation and, at the same time, reduce emissions and transportation costs for the energy sector. Increased pipeline capacity will also potentially generate increased royalties and revenues for the province.
Cenovus Energy operates Husky Midstream.
The Government of Saskatchewan will accept applications under the OIIP program until March 31, 2025.
