OPTI Canada Inc. Approves Long Lake Oil Sands Project

The Board of Directors of OPTI Canada Inc. has approved proceeding with commercial development of the $3.4 billion Long Lake Project, the fourth major integrated oil sands project in Alberta.

"Board approval is a major milestone and the culmination of our efforts over the past four years," said Sid Dykstra, President & CEO of OPTI. "Long Lake is the first oil sands project to integrate steam assisted gravity drainage (SAGD) with an onsite upgrader. This unique configuration is expected to result in a $5 to $10 per barrel operating cost advantage over existing integrated oil sands projects."

The Long Lake Project, located 40 km southeast of Fort McMurray, is a 50/50 joint venture of OPTI and Nexen Inc.. The first phase of the project consists of 72,000 barrels per day (b/d) of SAGD oil production and an integrated upgrader which will yield approximately 60,000 b/d of premium synthetic crude oil. The upgrader will use OPTI's proprietary OrCrude(TM) process along with commercially available hydrocracking and gasification. This unique configuration of proven processes will significantly reduce the need to purchase outside fuel and essentially eliminate the high cost and volatility of natural gas. The Project will produce a premium synthetic crude oil with an expected gravity of 39 degrees API and very low sulphur content, making it a highly desirable refinery feedstock. Construction at Long Lake is expected to begin in the latter half of 2004; SAGD operations are scheduled to commence in 2006 and the upgrader start up in 2007. Regulatory approvals for the project were received in 2003 from the Alberta Energy and Utilities Board and Alberta Environment.

"A tremendous amount of work has been completed prior to approval of the project-operation of a SAGD pilot facility, operation of an OrCrude(TM) demonstration plant, delineation drilling, 3D seismic and, most importantly, a high degree of project definition and construction planning," said Mr. Dykstra. "All of these activities are directed to delivering the Long Lake Project on schedule and within budget."