PROVIDING SOLUTIONS FOR ENERGY SECURITY Looking for a location with untapped potential?
A Vast Land / Significant Oil and Gas Potential
Saskatchewan is Canada’s second-largest oil producer (approximately 28,000 producing wells in 2011) and the third-largest natural gas producer (approximately 19,000 producing wells in 2011).
Of the 32.4 million hectares (80 million acres) of oil and gas rights available within the surveyed portion of the sedimentary basins of the province, over 25 million hectares (62 million acres) are provincially owned with only 5.6 million hectares (13.7 million acres) • About 14% of Canada’s currently under disposition to oil and gas oil production companies. •
The petroleum industry continues to grow with an estimated $4.5 billion invested in oil and gas exploration and development in 2011.
The second-largest oil producer in Canada
Saskatchewan is third among the provinces in natural gas production.
Natural Gas / Plenty to Explore
Approximately 19,000 gas wells produced 6.2 billion cubic metres (218.9 billion cubic feet) of associated and non-associated natural gas in 2011.
Remaining recoverable natural gas reserves in Saskatchewan are estimated at 77.6 billion cubic metres (2.8 trillion cubic feet). With vast amounts of undeveloped land in the province’s gas prone areas, there is significant potential for the discovery and development of additional gas pools.
www.economy.gov.sk.ca
Low-Cost Operations
Most of Saskatchewan’s natural gas is produced from relatively shallow reservoirs ranging in depth from 275-760 metres (900-2,500 feet).
Saskatchewan gas is dry and sweet and requires limited processing.
Land acquisition costs are low.
Saskatchewan’s terrain is relatively flat and dry and easy to access.
Producers have access to an extensive collection and transmission system.
Oil / Potential for More
With half the province situated over the same sedimentary basin that provides most of Canada's crude oil, there is plenty of promise in the oil patch.
Only about 13 per cent of the estimated 45.6 billion barrels (7.3 billion cubic metres) of oil initially in-place is recoverable based on current and expected conditions. With approximately 87 per cent of the oil remaining in the ground, there is excellent potential for the use of enhanced oil recovery methods and new technologies.
A large-scale CO2 capture facility in Beulah, North Dakota, connects to the oil fields in southeast Saskatchewan via pipeline, enabling enhanced oil recovery (EOR) using CO2.
Access to Resources / Access to Markets
Easy field access and relatively shallow deposits contribute to low drilling costs.
Excellent geological information helps to reduce drilling risks.
Stable markets can be easily accessed by pipelines.
Northward extension of the oil-producing area in southeastern Saskatchewan and the development of many of the heavy oil fields present numerous opportunities.
Refining / Processing
The Co-op Refinery Complex in Regina processes approximately 15,900 cubic metres (100,000 barrels) per day, 55,000 barrels (8,700 cubic metres) of which is heavy crude. The Co-Op Refinery Complex is expanding in 2012 to a capacity of 20,700 cubic metres (130,000 barrels) per day.
Husky Energy Inc. Lloydminster Upgrader, upgrades approximately 13,000 cubic metres (82,000 barrels) per day of heavy crude into light synthetic crude
Moose Jaw Refinery operates a 2,200 cubic metres (14,000 barrels) per day refinery in Moose Jaw which processes heavy crude into road asphalt, drilling fluids and roofing flux.
Pipelines There is an extensive network of pipelines in Saskatchewan for transporting crude oil, natural gas and refined products.
SaskEnergy Inc. and its subsidiary, TransGas Limited, operate one of the largest natural gas pipeline collection and distribution networks in North America (14,000 km transmission and 67,000 km distribution). The TransGas transmission system enables producers to get quick turnaround from drilling to market.
TransGas interconnects with TransCanada Pipelines, Foothills Pipe Lines Ltd. and Williston Basin Interstate Pipeline to enable producers to reach customers throughout Canada and the U.S.
The main oil collection and gathering pipeline systems in the province – including Husky Pipeline, Enbridge Pipelines (Weyburn and Saskatchewan), Mid-Saskatchewan Pipeline, South Saskatchewan Pipeline, Manitou Pipeline, Wapella Pipeline, Cactus Lake Pipeline and Wascana Pipeline – enable producers to transport crude oil from the field to major pipelines and terminals in an efficient and timely manner.
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The three major oil pipeline transmission systems that transport Saskatchewan crude oil to refining markets are the main Enbridge Pipeline, which originates in Edmonton and passes through Saskatchewan enroute to Eastern Canada and the U.S.; the Keystone Pipeline, which runs from Hardisty, Alberta into the U.S., as well as the Express Pipeline, which runs south from Hardisty, Alberta into the U.S.
Markets / Accessible and Reliable
Approximately 65-70 per cent of Saskatchewan’s oil production is exported to the U.S., 15-20 per cent is exported to other Canadian provinces and the remainder stays within Saskatchewan.
Natural gas producers have the choice of exporting their gas or selling within Saskatchewan to large industrial clients, marketers and brokers, or the provincial gas utility.
Geophysical and Well Data to Assist Development
Producers have access to geological data (the most complete core lab in Canada), seismic data (program submissions, shot point location maps, structure maps, gravity maps and magnetic maps), well location maps and well data (licences, drilling information, completion information, core analyses, fluid analyses, drill stem tests, co-ordinate information, logs, geologic tops and analyses).
R&D / New Tools to Increase Production
Oil and gas are knowledge-intensive industries relying on new and evolving technologies to improve discovery rates, improve recovery rates and increase oil production levels.
The Petroleum Technology Research Centre (PTRC) and Saskatchewan Research Council – together with Saskatchewan’s universities – provide expertise and research infrastructure to assist the oil and gas industries. Petroleum Technology Research Centre
Courtesy Saskatchewan Research Council The PTRC is recognized internationally as a leader in petroleum research and development. Companies wishing to access the PTRC knowledge base and infrastructure and participate in its groundbreaking research are able to do so with a modest investment into the partnership.
The International Test Centre for Carbon Dioxide Capture, located at Innovation Place Regina, is developing innovative technical solutions to economically capture CO2 from industrial gas streams. This captured CO2 may be useful for enhanced oil recovery (EOR). FACT Over the life of the projects, the Weyburn and Midale CO2 miscible floods will inject and store some 35 million tonnes of CO2 from Dakota Gasification and will produce 222 million barrels of incremental oil.
Pioneering EOR technologies using CO2 could extend the production life of many of Saskatchewan’s oil fields and could sequester a significant volume of CO2 to reduce greenhouse gas emissions.
Alternative Energy The province is also working to develop alternative energy to further diversify our energy base while protecting the environment. Examples include: Hydrogen Fuel
Courtesy Saskatchewan Research Council
Using hydrogen as an alternative fuel can significantly reduce greenhouse gas emissions.
The Saskatchewan Research Council demonstrated the world’s first truck fuelled by a combination of hydrogen and diesel fuel in 2004, and the world’s first hydrogen-gasoline vehicle in 2005.
Wind Power
Wind power is an important renewable resource that provides a clean and inexhaustible source of energy.
SaskPower’s $272-million, 150 MW Centennial Wind Power Facility is one of the largest wind facilities in Canada.
Saskatchewan’s total wind capacity – 172 MW – accounts for 5 per cent of Saskatchewan’s electricity capacity.
Ethanol
With almost half the arable land in Canada, Saskatchewan has the abundant agriculture land to produce crops that could be turned into ethanol. As the first province in Canada to pass legislation to mandate the use of ethanol, Saskatchewan is positioned to be a major Canadian supplier of ethanol.
Five ethanol plants are currently operating in Saskatchewan:
- the 12.5-million-litre Pound-Maker operation in Lanigan – Canada’s first integrated feedlot/fuel ethanol facility;
- the 25-million-litre NorAmera BioEnergy facility in Weyburn; - the 130-million-litre Husky facility in Lloydminster; - the 150-million-litre Terra Grain facility at Belle Plaine – one of the largest wheat-based ethanol plants in North America, and
- the 25 million-litre North West Bio-Energy facility in Unity.
Other facilities throughout the province are in various stages of planning and construction. Some are considering alternative feedstocks using cellulosic material like wheat straw and wood waste.
In September 2006, the Saskatchewan Research Council unveiled a retrofitted 7110 Deutz model tractor that has been modified to operate on 100% hydrated ethanol
Courtesy Saskatchewan Research Council
Competitive Royalties and Incentives Encourage Development
Saskatchewan’s royalty rates – among the lowest in Canada – have been developed in partnership with industry and are sensitive to price and production rates. Qualifying petroleum research and development field projects are eligible for a 30 per cent to 50 per cent royalty credit under the terms of the Saskatchewan Petroleum Research Incentive.
Natural Gas / Incentives to Drill
A maximum royalty rate of 2.5 per cent and freehold production tax rate of 0 per cent is applicable to the first 25,000,000 cubic metres of gas produced from each new exploratory or horizontal gas well. With vast amounts of undeveloped land in our gas-prone areas, there is significant potential for increased development, such as the Shackleton development in the southwest corner of the province.
Oil / Incentives for New Wells and Enhanced Production
Newly drilled oil wells classified as horizontal, exploratory or deep qualify for "volume based" drilling incentives ranging from 4,000 to 16,000 cubic metres. Maximum royalty rates of 2.5 per cent and a freehold production tax rate of 0 per cent are applicable to specified initial volumes of oil produced from the new wells. Incremental production from new enhanced oil recovery (EOR) projects is subject to reduced royalty rates. Prior to EOR project investment payout, project production is subject to a Crown royalty rate of 1 per cent of gross revenue and a freehold production tax rate of 0 per cent. After investment payout, the Crown royalty rate is 20 per cent of operating revenue and the freehold production tax rate is 8 per cent of operating revenue.
Want to know more? For further information and access to Saskatchewan’s site selection services contact: Ed Dancsok Assistant Deputy Minister Petroleum and Natural Gas Saskatchewan Ministry of the Economy 200 - 2101 Scarth Street Regina, SK S4P 2H9
Phone: (306) 787-2591 Fax: (306) 787-2478 E-mail: ed.dancsok@gov.sk.ca Web: www.economy.gov.sk.ca
Disclaimer: The information in this document is accurate as of May 2012; however the Government of Saskatchewan accepts no liability for any actions taken as a result of the information contained herein. Printed in Canada.