INNOVATIVE EXECUTION OF THERMAL FACILITIES PROJECTS

Introduction • Industry Norms for Economic Threshold Capacities for Thermal Heavy Oil

Facilities Projects: – Pre-2008 30,000 bpd – 2008-2014 3,000 bpd

• Innovative Execution Strategy • Propak Experience – 40 years of Modular Processing Plant Delivery • Highly Attractive Project Metrics

– Short Project Life Cycles: < 18 Months – Low Capital Cost Intensities: < $25,000 /bpd

• Three Recent Thermal CPF Projects Completed and Operating to Date • Four Additional Thermal CPF Projects Underway

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Execution Strategy

• Maximized Modularization

• EPFC by Single Contractor

• Standardized Practical Design

• Integrated Assembly Line

• Lump Sum Contracts

• Accelerated Production Strategy

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Maximized Modularization • Move Labour From Site to Shop • Shop Labour:

– Skills & Productivity – Continuity of Resources – Eliminate Travel & Subsistence

• Module Envelope Dimensions in Alberta and Saskatchewan • Piperack Modules c/w HT, Insulation, Hydro, Cable Tray • Equipment Modules c/w Piping, Cable Tray, JBs, Remote I/O • Ship-Loose Pre-Fabricated Equipment • Ship-Loose Spools, Members, Misc. in Containers • Propak – 40 Years of Modular Plant Design and Construction

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Piperack Module

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Equipment Module

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Ship-Loose Equipment

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EPFC By Single Contractor • Integration of Phases • Eliminate Engineering/Fabrication/Construction Interfaces • Standardization of Design • Standardization of Work Processes • Capture Learnings from Previous Projects • Continuous Improvement – Propak Specifications and Procedures • Continuity of Resources • Non-Duplication and Integration of Resources Between Owner and

Propak – Collaborative Approach

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Standardized Practical Design • Proven in Industry • Fit-For-Purpose Design

– Matching Facility to Resource – Minimize Design/Safety Factors – Curtail Civil/Structural Absurdities – Resist E/I/C Latest Gadget Mentality – Eliminate Sacred Cows

• Cookie-Cutter Plug and Play Module Design • Standardized Design – Tuned to Specific Parameters • Stock Plants – Building Blocks • Phased Approach • On Stream Availability ≥ 90%

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Standardized Practical Design - Saskatchewan • Production Treatment System – Inlet Cooling, FWKO, Treater, Sales Oil

• Produced H2O Treatment System – Skim Tank, IGF, Disposal

• Produced Gas Treatment System – Water Removal, HC Liquids Removal, Recycle as Fuel

• Raw H2O Treatment System – Media Filter, SAC

• BFW/Steam Generation System – LP/HP BFW Pumps, Heating, OTSGs, HP Separator

– OTSGs are Rifled-Tube Generating 90% Quality Steam Standard

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Standardized Practical Design - Alberta • Production Treatment System – Inlet Cooling, FWKO, Treater, Sales Oil, No Diluent

• Produced H2O Treatment System – Skim Tank, IGF, ORFs, Recycle as BFW

• Produced Gas Treatment System – Water Removal, HC Liquids Removal, Recycle as Fuel

• BFW Treatment System – Hot Lime Softener, After Filters, WACs, Lime Sludge Centrifuge

• BFW/Steam Generation System – LP/HP BFW Pumps, Heating, OTSGs, HP Separator

– OTSGs are Rifled-Tube Generating 90% Quality Steam Standard

• Blowdown/Disposal System – LP Separator, Evaporator, Disposal to Meet AER Directive 81

• Innovative Water Treatment Technologies in Development

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Integrated Assembly Line • Propak Fabricates & Assembles:

– Equipment Modules – Piperack Modules – Ship-Loose Equipment

• Pressure Vessels • Heat Exchangers • Gas Compression • Power Generation

– Piping Spools – Structural Steel Members – Electrical Power (MCCs) and Full Control/Automation

• Standardized Designs • Full Production Line Approach – All Disciplines/All Phases

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Lump Sum Contracts

• Options: – Reimbursable EPF & CM

– Reimbursable EPFC

– Lump Sum EPF & Reimbursable C & CM

– Lump Sum EPFC

• Lump Sum creates Price and Schedule Certainty

• Propak Is Prime Contractor

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Accelerated Production Strategy • No Pre-FEED Stage • Reduced FEED Stage • Overlap of Phases

– Good PM Practices – Still Follow PDM – No “Hard” Stage Gates

• Construction Drives Schedule – Winter Window for Heavy Haul/Lift Campaigns – Summer Window for Earthworks & Commissioning

• Pre-Investment / Pre-Build / Inventory

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Thermal CPF Projects COMPANY PROJECT LOCATION CAPACITY (BPD) SCOPE STATUS

HUSKY PIKES PEAK SOUTH SASK 8,000 EPF OPERATING

HUSKY PARADISE HILL SASK 3,500 EPFC OPERATING

HUSKY SANDALL SASK 3,500 EPFC OPERATING

BLACKPEARL ONION LAKE SASK 6,000 EPFC CONSTRUCTION

CONFIDENTIAL - SASK 6,000 EPFC DETAILED ENG

BAYTEX GEMINI ALBERTA 5,000 EPFC FEED

HUSKY EDAM WEST SASK 5,000 EPF DETAILED ENG

CONFIDENTIAL - SASK 6,000 EPFC COMMERCIAL NEGOTIATION

CONFIDENTIAL - SASK 6,000 EPFC COMMERCIAL NEGOTIATION

CONFIDENTIAL - ALBERTA 6,000 EPFC COMMERCIAL NEGOTIATION

CONFIDENTIAL - ALBERTA 12,000 EPFC COMMERCIAL NEGOTIATION

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Paradise Hill – First Oil June 2012

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Pikes Peak South – First Oil July 2012

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Sandall – First Oil Dec 2013

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THANK-YOU

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