Is Saskatchewan’s Oil and Gas Processing Investment Incentive (OGPII) worth it?

If you’re planning a major oil or gas processing investment in Saskatchewan, the Oil and Gas Processing Investment Incentive (OGPII) can make a real difference to your project’s bottom line. OGPII is not a cash grant. Instead, it is a provincial tax and royalty incentive that helps lower the cost of building, expanding, or upgrading processing facilities in Saskatchewan. The main question is whether the savings are enough to balance the paperwork you’ll need to handle, the timing of the process, and the capital you’ll need to commit.

What is OGPII?

The Oil and Gas Processing Investment Incentive (OGPII) is a Saskatchewan government program that encourages companies to invest in processing infrastructure, not just drilling.

OGPII works as a tax and royalty-based incentive. Here’s what that means:

You do not get cash upfront.
The benefit comes from lower provincial taxes or royalties linked to your processing investment.
The value depends on how much you spend and how your project is set up.

This makes OGPII most useful for established companies with taxable income or royalty payments in Saskatchewan.

Who is OGPII for?

OGPII is aimed at companies investing in midstream and processing infrastructure, such as:

Building new oil or gas processing facilities
Expanding existing processing plants
Making major upgrades that boost capacity or efficiency

Projects focused only on exploration, drilling, or small repairs usually do not qualify.

Who can apply?

To be eligible, you must:

Be an oil or gas company investing in Saskatchewan processing infrastructure
Have your project physically located in Saskatchewan
Meet provincial reporting and compliance rules

Because OGPII uses tax and royalty rules, it’s best for companies with long-term operations in the province.

How much is OGPII worth?

There is no set maximum. The value of OGPII:

Grows with your eligible capital investment
Depends on the program rules at the time you apply
Is earned over time, not all at once

For large processing projects, OGPII benefits can reach millions of dollars in reduced taxes or royalties, depending on the size and scope of the project. Actual savings will vary. For example, a facility with a large capital investment and high production could see significant reductions, while smaller projects may see less benefit.

If you want to compare OGPII with other Saskatchewan incentives, GrantHub’s eligibility matcher lets you filter programs by project type and funding needs.

When OGPII Is Worth It

OGPII can be a strong incentive, but it is not always the right choice for every company.

OGPII is usually worth it if:

You are investing a lot of capital in a processing facility.
Your project will run for many years in Saskatchewan.
You expect to have ongoing taxable income or royalty payments in the province.
Your team can handle government reporting and compliance.

OGPII may not be worth it if:

Your project is small or will not last long.
You need cash upfront to start building.
Your company doesn’t owe much in Saskatchewan taxes or royalties.
The paperwork and reporting are more trouble than the savings.

OGPII often works best when combined with other provincial or federal programs that support infrastructure, emissions reduction, or industrial efficiency. Always check how these programs can work together for your project.

Common Mistakes to Avoid

Thinking OGPII is a cash grant
OGPII only reduces taxes or royalties. It does not give you money upfront.
Applying too late
You usually need approval before you start major construction. If you wait too long, some costs may not count.
Guessing the benefit
The value depends on your future production, taxes, and royalties. You should model the numbers carefully before making decisions.
Not checking stacking rules
Some incentives can be combined, but others can’t. Make sure you know the rules before you apply for multiple programs.

GrantHub’s program tracker helps you see which incentives work together and can help you avoid these common mistakes.

Frequently Asked Questions

Q: Is OGPII a grant?
No. OGPII is a tax and royalty-based incentive, not a cash grant.

Q: Is the OGPII program currently open?
As of June 2024, OGPII is open to applications. Always check the Government of Saskatchewan website for the latest updates and program status.

Q: What projects qualify for OGPII?
OGPII covers new processing facilities, expansions, and major upgrades that increase processing capacity or efficiency.

Q: Are OGPII benefits taxable?
OGPII works through tax and royalty reductions, so the benefits are not treated the same as taxable grant income.

Q: Can OGPII be combined with other incentives?
Often yes, but stacking rules differ. Review each program’s terms or use a tool like GrantHub to compare options for your project.

If OGPII does not fit your project, these guides may help you find other options:

How Saskatchewan Oil Royalties and Incentives Support Energy Projects
Energy, Oil, Gas, and Petrochemical Incentives: Project Eligibility Guide
How to Fund Oil and Gas Emissions Reduction and Infrastructure Projects

Next Steps

OGPII is worth considering if your business is investing a lot in Saskatchewan-based processing infrastructure and can use long-term tax or royalty reductions. The key is to see how OGPII fits with your full funding plan. GrantHub can help you compare OGPII with other provincial and federal programs, so you get a clear picture before making a big commitment.

Is Saskatchewan’s Oil and Gas Processing Investment Incentive (OGPII) worth it?