FLARE GAS TO GENERATE ELECTRICITY

Released on December 17, 2001

SaskEnergy and SaskPower are joining with Flatland Exploration Ltd., a

Saskatchewan-based energy company, for an innovative pilot project that

will use flare gas to generate electricity.



During the project, flare gas will be used to run two microturbines that

will generate approximately 60 kilowatts of electricity – about enough

electricity to meet the annual needs of 20 households. Flare gas, a by-

product from the process of extracting and processing oil, is normally

flared and the energy is wasted. Electricity generated by the

microturbines will be delivered into SaskPower's electrical distribution

grid by April 2002. The pilot project will be located at a Flatland

Exploration Ltd. oil treatment and processing site near Carlyle.



"The willingness of SaskPower and SaskEnergy to partner with the private

sector demonstrates our government's commitment to the production of

electricity in an environmentally friendly manner," Energy and Mines

Minister Andrew Thomson said, on behalf of Crown Investments Corporation

Minister Maynard Sonntag. "This pilot project provides all involved with

an excellent opportunity to investigate the feasibility of distributed

generation, which holds much promise in a province as vast as Saskatchewan."



Distributed generation describes the process of producing electrical power

on a small scale at a consumer's site.



"Flatland is pleased to be part of this co-operative and unique effort to

investigate the feasibility of flare gas as a means of generating

electricity," Flatland Exploration Ltd. Manager of Business Development Jim

Baker said. "We are eager to share with SaskPower and SaskEnergy in the

lessons we will learn during this pilot project."



"SaskPower's participation in this project reflects our commitment to

address climate change issues and minimize the impact electrical generation

has on the environment," SaskPower President and CEO John Wright said.

"This project will play an important role in our ongoing evaluation of

alternative energy development."



"It is important for SaskEnergy to examine all opportunities for

alternative sources of energy," SaskEnergy's VP of Business Development and

Market Services Dean Reeve said. "Utilizing gas that is otherwise being

flared to produce electricity makes good environmental and economic sense."



As part of the partnership, SaskPower issued a request for proposals for

the supply, installation and commissioning of the microturbines. Capital

costs will be shared between SaskEnergy and SaskPower. Flatland

Exploration Ltd. is providing the test site and flare gas.



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For more information, contact:



Larry Christie Ron Podbielski Jim Baker

SaskPower SaskEnergy Flatland Exploration

Regina Regina Regina

Phone: (306) 566-3167 Phone: (306) 777-9432 Phone: (306) 789-5200