OPTI and Nexen are planning the next development, which is referred to as Kinosis, located in the southern portion of the Long Lake Leases. At Kinosis, we plan to stage our SAGD development prior to building an upgrading facility rather than developing the integrated project simultaneously. We have regulatory approvals for Kinosis SAGD development for up to 140,000 bbl/d of bitumen production and we are evaluating building the SAGD projects in approximately 40,000 bbl/d bitumen stages and intend to sanction the first stage in 2012. Additional stages of Kinosis SAGD will proceed thereafter. A second Upgrader would be built once sufficient bitumen rates from the Kinosis area have been reached and economic conditions support the development of upgrading.

Staged SAGD development, as discussed above, offers several advantages: lower capital intensity for development; a reduction in labour requirements; better construction cost and execution control; and the ability to use PSC volumes from our Long Lake Upgrader for self-supplied diluent to blend with bitumen volumes from expansion projects.