Gas Cost Allowance

The Gas Cost Allowance (GCA) offsets the capital (PDF) and direct operating costs (PDF) associated with:

  1. processing the Crown’s share of raw gas at a producer-owned gas plant, and
  2. transporting the Crown’s share of residue gas through a producer-owned sales line

A producer may receive the GCA if they:

  • own a gas plant or sales line for their own use
  • own a dry gas source
  • pay to use a producer-owned gas plant or sales line

Producers who pay a custom-processing fee to process and/or transport their gas at another producer-owned gas plant will only receive the approved GCA rate for the period of time they used the plant.

The GCA is a rate per 103m3 of raw gas as measured at the plant inlet. It is calculated by dividing the annual capital (PDF) and direct operating costs (PDF) by the plant’s annual raw gas throughput. Estimated costs and raw gas throughput are reported by the plant operator annually, and are adjusted using the actual amounts reported in the following year.

The GCA is deducted from a producer’s average gas sales price at the producer-owned plant and is used to calculate the producer price each month.

For more information on the GCA, see section 5.6 in the Oil and Gas Royalty Handbook (PDF).

Apply

To apply for the GCA for a new facility, the facility operator must submit a BC-23, Application for Gas Cost Allowance within two months prior to start-up. For each subsequent year, a BC-23 must be submitted by March 15 of the following year.

Operators of producer-owned gas plants who have one or more producer-owned sales lines are required to submit separate BC-23 applications: one for the producer-owned gas plant and one for the producer-owned sales lines.  See Information Letter 2015-05, Gas Cost Allowance Reporting Procedures, for more information.