Husky Midstream Pipeline

HUSKY MIDSTREAM PIPELINE EXPANSION RAMPS UP, FIRST PROJECT COMPLETED UNDER OIL INFRASTRUCTURE INVESTMENT PROGRAM

Husky Midstream General Partnership (HMGP) continued to safely and successfully deliver additional crude oil pipeline capacity in 2021 with the completion of its Saskatchewan Gathering System (SGS) Expansion project, the first to be brought into service under the provincial government’s Oil Infrastructure Investment Program (OIIP).

The project provides new shipping capacity of up to 48,000 barrels per day of crude oil, with 62 kilometres of new pipeline and 12 kilometres of replacement pipe. The expansion resulted in an $82 million investment near Spruce Lake, about 100 kilometres northeast of Lloydminster, helping to support oil production growth and broader access to export markets. The project also created about 450 construction-related jobs at peak.

“The Oil Infrastructure Investment Program is helping companies like ours invest in new transportation infrastructure that supports customers developing new production opportunities to attract investment to the province,” said Husky Midstream CEO Duane Rae. “The expansion project is operating well since coming on line and having a positive impact on oil transportation in Saskatchewan.”

The OIIP was first introduced by the Ministry of Energy and Resources in 2020. The program offers transferable oil and gas royalty/freehold production tax credits, at a rate of 20 per

These crude oil processing and transfer facilities at Spruce Lake Central are part of the recently completed Husky Midstream Saskatchewan Gathering System expansion project.

cent of eligible costs, for qualified projects that contribute to a significant increase in provincial pipeline capacity.

The Saskatchewan government welcomed completion of the project, calling it a step towards meeting the province’s Growth Plan targets to increase oil production by 25 per cent to 600,000 barrels per day by 2030. The government also said the project will increase Saskatchewan oil producers’ access to processing and export infrastructure, supporting growth. Husky Midstream’s project, along with other anticipated new and expanded pipeline infrastructure, is helping to alleviate record level demand for rail and truck transportation for oil and, at the same time, is expected to contribute to reduced emissions and transportation costs for the energy sector, the government said in a July news release.

Husky Midstream’s SGS carries blended crude and condensate between thermal plants in Saskatchewan and upgrading and refining facilities in the Lloydminster region, as well as Hardisty, Alberta.

Since being created in 2016, Husky Midstream, has been working with its customers to undertake a multi-year expansion of the SGS. The timing of the various phases of the expansion has been adapted to customers’ crude oil production plans.

The various expansion projects, including the latest phase, include connections to four new thermal facilities, line upgrades and extensions, and enhanced safety measures at river crossings. These phased expansions demonstrate Husky Midstream’s commitment to the west-central region of Saskatchewan, and to providing customers with a safe, reliable, and cost-effective transportation solution.

Cenovus Energy, which owns 35 per cent of Husky Midstream, became the operator after acquiring Husky Energy on January 1, 2021.