Ann: Update on KALiNA Energy Centre Saddle Hills, page-50

Securing project finance based on merchant market basis?

Merchant market adds risk which would add to uncertainty around finance. Leaves margins to market forces but gives the company more flexibility if they do find a gas purchase that is beneficial to directly supply the project themselves thus leaving scope for greater upside.

Engineering Procurement Fabrication & Construction?

KPO have the Class 2 FEED detailed estimating and engineering report so it is now up to Enerflex if they want the EPFC contract or not. If they don't then KPO are capable of either shopping it around to other firms or even going it alone, there is a lot of expertise within the board and management, although that option would use up a lot of resources that would be better placed (for shareholders) in progressing other projects alongside the completion of the Saddle Hills project. Obviously this option would delay FNTP but do we want the best deal for KPO shareholders or do we want the best deal for Enerflex shareholders?

Permitting & Environmental?

Permits from AUC are approved, still waiting on environmental approval. Unfortunately the environmental authority is not as transparent as the AUC so I cannot determine the cause of the delays, progress or tim.

Electrical Interconnection?

Approval has already been given by the AUC so it's just a matter of costings, contracts etc with the electrical authorities, APCO & AESO. My understanding is that this should not impact on FNTP.