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, oil or natural gas liquids (NGL) through a producer-owned sales line

The GCA is deducted from the producer's monthly producer price and is used to value the crown's share of royalty volumes. 

A producer may receive the GCA if they:

  • Own a gas plant or sales line for their own use
  • Pay to use a producer-owned gas plant or sales line

Producers who pay custom processing fees to process or transport their gas at producer-owned facilities may only claim the approved GCA rate rather than their custom processing fee.

The GCA rate is calculated by dividing the eligible costs (depreciation, return on rate base and direct operating costs) by the plant or sales line’s annual throughput.

Estimated costs and throughput are reported by the facility operator annually, and are adjusted using the actual amounts reported in the following year.

For more information on applying for a GCA rate, see the Oil and Gas Royalty Handbook (PDF).