SaskPower signs power contract for flare gas-to-power facility

SaskPower agreed to buy power produced by a planned 15-MW flare gas-to-power facility near Coleville, Saskatchewan, under a 20-year contract with Flying Dust First Nation and Genalta Power Inc.

The Kopahawakenum facility, which will use waste natural gas to produce electricity, is expected to come online in 2023. The project is estimated to cost about C$30 million, according to a Nov. 23 news release from SaskPower.

In May 2018, the province-owned utility signed an agreement with the First Nations Power Authority to source as much as 20 MW generated from gas that would normally be burned off, or flared, as a byproduct of oil and gas production.

Saskatchewan is home to most of the Canadian portion of the Bakken Shale, among other oil deposits. Piping and processing associated gas from those operations is often not economically feasible, so it is commonly burned in flares. The First Nations plan is to instead use that gas as fuel for small generators connected to the provincial power grid.

The Kopahawakenum facility will require about 4 million cubic feet of gas per day, resulting in the reduction of approximately 100,000 tonnes of carbon dioxide equivalent annually, according to the release. The provincial Methane Action Plan, released in January 2019, aims to reduce methane-based gas emissions by 40% to 45% by 2025.

The project is conditionally approved under the province's oil and gas processing investment incentive and the Saskatchewan petroleum innovation incentive. Under both programs, government investment follows up-front private investment.

"This is a win-win, as the oil and gas operation can generate revenue and reduce its exposure to the carbon tax, while contributing to the Province of Saskatchewan and SaskPower's efforts to reduce greenhouse gas emissions," said Don Morgan, the minister responsible for SaskPower.