Access Pipeline and Edmonton Diluent Pipeline

MEG also owns a 50% interest in a 343 km dual pipeline system known as the Access Pipeline between its oil sands leases in Christina Lake and the Sturgeon Terminal blending facility located near Edmonton, Alberta, a large regional upgrading, refining and transportation hub. This pipeline gives MEG the ability to custom blend its bitumen and access the most diverse markets available compared to third-party transportation alternatives, which reduce MEG’s exposure to light / heavy differentials and increases netbacks.

Construction of the Access Pipeline is complete and it is expected that it will be tied-in and ready for production in the fourth quarter of 2007. This proprietary pipeline offers a number of strategic advantages compared to the alternative of using a third party pipeline that terminates elsewhere in Alberta. The area in which the Sturgeon Terminal is located is a regional refining and transportation hub offering MEG an opportunity to enhance the value of its production. It is also a significant regional source for diluent and offers access to Canadian and U.S. west coast refining and transportation markets that are not accessible via other pipeline systems. By securing a proprietary means of transporting diluent to Christina Lake and bitumen-diluent blend to Edmonton, MEG expects to significantly reduce its dependence on third parties, lower its overall costs and, at the same time, strategically enhance the project by providing access to additional markets for its production.

The Sturgeon Terminal will allow MEG the flexibility to customize its bitumen-diluent blend to individual refiner specifications and take advantage of changing market conditions. As a consequence, MEG should have the ability to market its products to a wider array of refineries and optimize its realized product pricing. The specialized blends are planned to be batched and shipped through various pipelines that serve or will serve the area in which the Sturgeon Terminal is located. The Edmonton Diluent Pipeline Project involves a 38 km extension of the 16" diluent pipeline from the Sturgeon Terminal to Edmonton. In late February 2007, the regulatory application for this extension was filed and stakeholder discussions are well underway. It is anticipated that regulatory approval will be obtained in late 2007 and the pipeline extension will move into field construction in the first quarter of 2008. The project is planned to be operational in the third quarter of 2008.