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Licence to Construct and Operate Oil and Gas Facilities

How to apply to the Ministry of Energy and Resources to construct and operate an upstream oil and gas facility in the province. 

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1. Guidance

A facility licence must be obtained from the ministry before constructing and operating an upstream oil and gas facility in Saskatchewan.

Read the following directives and guidelines for regulatory requirements related to facilities and their operation in Saskatchewan, as well as information to assist you in applying for a licence:

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2. Eligibility

Before applying for an upstream facility licence, you must:

  • Have an Integrated Resource Information System (IRIS) account and the appropriate permissions assigned by the IRIS Security Administrator to submit a facility licence application.
  • Be registered with Information Services Corporation (ISC) as a corporation to do business in Saskatchewan.
  • Obtain surface lease or access agreement from the surface owner of the chosen site.
    • If on Freehold lands, surface rights must be obtained from the landowner.
    • If on Crown land, obtain surface rights from either the Government of Saskatchewan's Ministry of Agriculture or Environment, depending on the location.
  • Contact the Rural Municipality to determine if a development permit is required.
  • Obtain environmental clearance from the Ministry of Environment.
  • Obtain a Heritage Resource Review through the Government of Saskatchewan's Ministry of Parks, Culture and Sport (Heritage Branch).
  • Submit a $10,000 non-refundable Orphan Fund fee if the licensee has not previously held a well/facility licence pursuant to The Oil and Gas Conservation Regulations, 2012 in the province of Saskatchewan. Use the Orphan Fund Fee Payment Form to submit the 'Orphan Fund - First Time Application Fee' to the Government of Saskatchewan.
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3. How to Apply

To apply for a licence to construct and operate an upstream facility:

  1. Ensure you meet the eligibility criteria listed above.
  2. Log in to IRIS; on the top navigation menu, hover the cursor over Applications, click on Petroleum and Natural Gas (left side of the screen), navigate to the Licence section and select Facility.
  3. Complete the facility licence application by answering a series of disclosure questions and input design values where required.
  4. IRIS will determine the required attachments or exemption requests based on the answers supplied.
  5. Prepare the required documents:
    • Facility Survey (required)
    • Equipment Spacing Diagram (required)
    • Process Flow Diagram (required)
    • Exemption Request Report
    • S-20 Evaluation
    • Dispersion Modelling
    • Gas Processing Facility Application
    • Waste Processing Application
    • Third-Party Engineering Report
    • Public Notice/Consents
  6. The licensee will be notified through IRIS whether the facility application will go routine or non-routine.
  7. Routine applications are approved immediately and subject to an audit process.
  8. Non-routine applications will require review and the licensee will be notified through IRIS if the licence has been approved or denied.
  9. Obligations are triggered by the approval and issuance of the Facility Licence which can be fulfilled in IRIS.

To apply to decommission a facility licence:

  1. Log in to IRIS; on the top navigation menu, hover the cursor over Applications, click on Petroleum and Natural Gas (left side of the screen), navigate to the Repair, Abandonment and Liability section and select Facility Infrastructure Decommission.
  2. Enter information on the facility site and licences that have been decommissioned.
  3. The following documents are required:
    • Cover letter that includes the type and location of the facility and signed by an official within the company requesting the status of the facility to be changed to abandoned and the deemed abandonment liability set to zero
    • Legal Land Survey
    • Photo log depicting the entire lease with shots from north, south, east and west looking into the centre of the lease.
  4. Facility Infrastructure Decommission applications require review and the licensee will be notified through IRIS if the licence has been approved or denied.
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4. Apply

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5. Further Information

Routine and Non-Routine Application

Facility Licence applications are classified either as Routine or Non-Routine in IRIS.

Routine Facility Licence Applications:
The applicant self-declares they meet all the necessary requirements and setbacks. These applications are issued automatically and do not require the ministry to review the application and make a decision.

Non-Routine Facility Licence Applications:
Based on the declarations made by the applicant, IRIS identifies that the licence application requires additional review before a facility licence can be issued. Non-Routine Facility Licence applications will require at least one of the ministries input to review the submitted application and make a decision on the application.

Facility Infrastructure ID, Facility Infrastructure Status and Facility Site ID

A single facility licence or combination of facility licences issued at the same surface location to an individual licensee is considered a site and each site is issued a Facility Site ID. Each facility licence is issued a Facility Infrastructure ID. The Facility Infrastructure ID status represents the state of the physical facility as planned, constructed, operating or decommissioned and the facility licence status would be issued, cancelled or suspended.

Request for S-20 Documentation Attachment

If flaring and/or venting is greater than 900 m3/day or the site is flaring and/or venting gas containing 10 moles per kilomole of H2S or greater, the following S-20 Compliance Documentation for the facility will be required with the licence application:

  1. Assurance that a professional engineer, certified technician, certified engineering technologist or registered engineering technologist is responsible for the design or review of flare and incinerator systems, including separation, related piping, and controls, and for the specification of safe operating procedures.
  2. Design related drawings and detailed design information of the flare stack and associated equipment and controls.
  3. Operational limits of flare. Ensuring that these procedures meet the design requirements. Flare must be operated within operational ranges and type of service specified by the designing or reviewing engineer, technician, or technologist.
  4. If H2S scrubbers are being used to chemically remove the H2S from the vent stream associated with the storage tanks, confirmation that the scrubber is designed for the volume of gas and H2S concentrations it is required to handle.

Acceptable documentation includes:

  1. Flares, combustors, and/or incinerators design drawings and process and instrumentation diagrams (P&IDs) showing all the piping, vessels, control valves, instrumentation and other components in the flare system. These design drawings are to be stamped by certified personnel and/or professional engineer, and:

A declaration from certified personnel stating the operational limits of the combustion device or scrubber on site is designed to handle the expected volumes.

Air Dispersion Model Attachment

If flaring and/or venting is greater than 900 m3/day and the gas contains 10 moles per kilomole of H2S or greater, the aforementioned S-20 Compliance Documentation is required and a dispersion model must be submitted to ensure that Saskatchewan Ambient Air Quality Standards (SAAQS) are being met. The dispersion model should be conducted in accordance with Saskatchewan Air Quality Modelling Guideline, 2012.

Construction Notification Obligation

Once the facility has been constructed the Construction Completion obligation on the facility licence can be fulfilled. To fulfill this obligation, complete the Facility Site Construction Completion Report under Infrastructure to report the completion of construction. Enter the facility site number in the Setup screen. In the report screen select the Facility Site and disclose if it has been completed as planned and enter the construction date. If construction has been completed as planned the Construction Completion obligation will now be fulfilled in the facility infrastructure. If the construction has not been completed as planned any changes to the survey, equipment spacing and process flow diagram will be declared in the Construction Completion Report. The new documents will then be uploaded to their respective obligations in the facility site in IRIS. When Construction Completion obligation is fulfilled the appropriate field office will be notified and the facility licence number will become available in Petrinex.

Report Facility Production Through Petrinex

The facility licence number can be used to obtain a Facility ID when the Construction Completion Obligation is fulfilled. Petrinex is the system industry uses to report volumetric, valuation and royalty taxpayer and some infrastructure data to the Government of Saskatchewan.

Emergency Planning Zones (EPZ)

An EPZ is a geographical area surrounding a well, pipeline, or facility containing hazardous product that requires specific emergency response planning by the licensee. An EPZ will be requested when the H2S concentration on a facility licence application is 1 mol/kmol or greater. If the EPZ encompasses any dwellings or public facilities, consultation with the persons or entities directly affected by an EPZ will be required. The recommended method for calculating the EPZ is AER's ERCBH2S Model.

As part of EPZ development, the following information should be provided to persons or entities directly affected by an EPZ:

  1. Name and contact information of operator;
  2. Map that shows EPZ relative to roads, dwellings, schools, public facilities and private property that may be used by the public in an emergency;
  3. Description of site-specific hazards and risks of the oil and gas activity that is the subject of the emergency response plan;
  4. How operator's response to an emergency may affect the person or entity receiving the information;
  5. How operator will notify the person or entity receiving the information and if/when the operator believes it is necessary to recommend shelter in place or evacuation in the event of an emergency; and
  6. How the person receiving the information can get to safety in an emergency.

The activities described in this subsection should include a request for the person or entity receiving the information to also provide the operator with:

  1. Name and contact information of a contact person; and
  2. Description of how the person/entity may be affected in the event of an emergency.

Sour Gas Management System

A facility licence application that has concentrations of H2S of 10 mol/kmol or greater will have further questions on the sour gas management system on the application. There will be a drop down list where you can choose one or multiple options that best describe the system.

  1. Flare: The combustion of gas with a flare stack.
  2. Incinerator: The combustion of gas with an incinerator.
  3. None: Select when there is no sour gas management system.
  4. Other: Select when the available options do not describe the sour gas management system proposed for the facility site.
  5. Scrubber: Using a material to remove the H2S out of the gas stream.
  6. To Market: Gas is not treated at the facility and is sent to another facility for further processing.
  7. VRU (Vapour Recovery Unit): A System which collects gas from the tanks and processing equipment as a closed venting system so they can be returned to the process or destroyed.

Is Combustion System Engineered?

This question is displayed when flare stack and/or incinerator has been selected as the sour gas management system. This question is referencing Directive S-20: Saskatchewan Upstream Flaring and Incineration Requirements compliance for the flare stack and/or incinerator. Answering 'Yes' indicates that the flare stack and/or incinerator is compliant with Directive S-20. Answering 'No' indicates that the flare stack and/or incinerator is not compliant with Directive S-20 and an exemption will be required to be reviewed by the ministry.

Inactive Licence Expiry

A facility licence will expire because of inactivity. A new facility licence will expire two years from the date of issue if construction and notification of the upstream facility has not been completed. This means that within a two-year time period, the facility must be at a stage where it is capable of performing the function that it was licensed to perform. After two years if construction is not completed or ER was not notified of the completed construction, ER will cancel the licence and remove it from the active records. It is the licensee's responsibility to ensure that the facility licence is still valid and has not expired prior to initiating any activity associated with the licence.

If an applicant does not intend to proceed with the licence, it may also contact ER Service Desk to request a cancellation of the licence.

Facility Licence Amendment

2S concentration, adding an additional facility licence type to an existing licensed facility site or an increase of the design inlet rate.

For example, if compression is added to an existing oil battery such that the new total compression exceeds 250hp, the compressor requires its own facility licence or if water disposal/injection is being added to an existing oil battery a water disposal/injection licence is required.

When a facility licence is being amended, the applicant will amend all facility licences associate with a Facility Site.

Facility Licence Resubmission

A licence resubmission is required if a previous licence application was denied. The user may enter the previous submission number from IRIS and will have the ability to clone the previously denied application and make the necessary changes to the application.

Pressure Safety Valve and Pop Tank Requirements

The pressure safety valve or relief device from a pressure vessel at an oil or gas facility should be connected to a pop tank or flare system. The relief system must be designed such that when the pressure-relief device activates, the relief system can safely manage the pressure and flow and withstand the increase in pressure without being damaged.

If the licensee does not utilize a pop tank or flare system in association with the relief device, the system must be engineered to ensure in an over-pressure scenario, product of any kind from an oil or gas well or facility shall be allowed to freely flow to the surrounding land.

An engineered system includes the following:

  • The pressure setting of the relief devices will not exceed the rated maximum operating pressure of the vessels.
  • Each pressure vessel will be equipped with its own high-pressure and high-level sensors and controls.
  • Sensors and controls will be connected to a valve installed on the inlet of the vessel that will shut off the flow of fluids into the vessel in the event of a high-pressure or high-level occurrence.
  • The pressure setting of the high-pressure sensors and controls will not exceed 90 per cent of the relief devices' pressure setting.
  • One or more isolation valves will be installed between the high-pressure sensor and the pressure vessel to facilitate testing of the sensor.
  • High-pressure and high-level sensors and controls will be function tested annually ensure that they are working correctly. A tag must be placed on the controls indicating the last test date.
  • Sensors and controls will be replaced or repaired immediately if they are defective or nonfunctional.
  • High-pressure and high-level sensors and controls will be calibrated annually. A tag must be placed on the controls indicating the last calibration date.
  • If the pressure-relieving device is directed to the atmosphere, PNG036 venting requirements must be met.

A pop tank is by definition open to atmosphere; therefore, if an operator directs a pressure relief device at an oil facility where the H2S content is greater than 10 mol/kmol to a pop tank, there must be redundant (i.e., two sets of) sensors and controls for both high pressure and high level installed on the pressure vessels.

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