ATCO Group Joins Shell to Pursue Development of a 170 MW Power Plant at Oilsands Project

Tuesday, February 16, 1999

CALGARY – Shell Canada Limited (Shell) and CU Power Canada Limited (CU Power), an ATCO company, today announced they will proceed with a joint feasibility study for the development of a cogeneration plant at Shell's Muskeg River Mine near Fort McMurray, Alberta.

The CU Power cogeneration facility will consist of two gas turbines with a total capacity of 172 MW. The Muskeg River Mine will use approximately half of the electricity with the balance being sold to the Alberta power grid. The Muskeg River Mine will use all the thermal output from the project.

CU Power will conduct a feasibility study for the cogeneration project in conjunction with Shell's ongoing feasibility studies for the other components of the Athabasca Oil Sands Project, including the Muskeg River Mine, Scotford Upgrader and Corridor Pipeline. When these studies are complete later in 1999, and subject to the required approvals, CU Power will build, own and operate the cogeneration facility. Start up is targeted for 2002 which coincides with the start up of the Muskeg River Mine.

Neil Camarta, Shell's Vice President, Oil Sands, said: "Shell is pleased to have CU Power on board our oil sands project. The proposed cogeneration plant is a double win. By improving the energy efficiency of the Muskeg River Mine - we will reduce the cost of producing bitumen and improve our environmental performance at the same time."

CU Power owns and operates independent power projects in Canada, England and Australia - including the 1000 MW combined cycle Barking power station in London, England and a cogeneration plant at Heathrow Airport. CU Power jointly owns the 120 MW McMahon cogeneration plant in British Columbia and also operates a 180 MW cogeneration project in Adelaide, South Australia.

Most recently CUPIL commissioned the 85 MW Primrose cogeneration station in northeast Alberta and a 45 MW power plant near Grande Prairie. As well, CU Power announced a joint venture agreement to develop a 550 MW combined cycle power plant in Mississauga, Ontario. Several other projects are under construction, including a 400 MW plant at Joffre, Alberta.

ATCO Group is Alberta based, with a worldwide organization of energy, technical services and manufacturing companies.

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