A key success factor for Parkland is our ability to have secure sources of fuel supply at competitive prices. Parkland continues to enjoy strong relationships with all three major refiners in western Canada and have long-term supply contracts in place. We maintain lifting rights at most western Canadian refineries and primary terminals which provide maximum flexibility to best serve our customers.

Fuel is delivered to our service stations and customers by a combination of our own fleet of tractor/trailers and commercial carriers. Operating our own fleet provides improved control of quality and timeliness of service. The acquisition of the Neufeld and Wiebe Transport companies in Grande Prairie, Alberta added long haul truck capacity to our fleet. The counter-seasonal demands of the propane and fertilizer businesses allow us to improve our overall fleet efficiency.

One of Parkland's key competitive strengths is its fleet of trucks. Petrohaul, based in Edmonton, Alberta with equipment located across western Canada, oversees Parkland's fuel hauling needs. Petrohaul manages and distributes fuel to approximately 600 retail and commercial locations across western Canada and the Territories. Petrohaul's fleet is satellite-dispatched with GPS tracking to ensure efficient on-time customer deliveries.

Wiebe Transport specializes in the transportation of bulk commodities such as grain, fertilizer, salt and other bulk dry goods with a rail distribution center located in Grande Prairie, Alberta. Wiebe serves Western Canada. As part of the operations, mechanical repair and maintenance facilities are located in both Grande Prairie and La Crete, Alberta, allowing the Parkland vehicle fleet to be serviced internally. The Wiebe fleet is part of Parkland's strategy for having increased capacity, versatility and flexibility for hauling fuel and other goods for meeting the needs of both internal and external customers. 

Parkland owns a refinery at Bowden, Alberta which suspended production in 2001. Parkland has been providing processing services to a local petrochemical plant to produce fluids used in the oilfield on a customer fee basis. These services offset some of the ongoing costs of maintaining the site. We have been able to take advantage of the tanks at the refinery for interim fuel storage to help balance our supply contract volumes and have refurbished the tanks and system to ensure this is a viable revenue producer longer term.

Parkland has a 25% interest in a consortium to conduct a feasibility study on the Beaver Hills project, an innovative gasoline, diesel, benzene and upgraded condensate manufacturing facility in the Edmonton, Alberta area.

The proposed facility would have a capacity of 36,500 barrels per day and would be located near existing distribution infrastructures in the County of Strathcona, east of Edmonton.  Parkland will be the exclusive distributor of the approximately 800 million litre per year output of gasoline and diesel fuel produced from the project. The feasibility study is part of the project's $8 million first phase, which also includes preliminary engineering, the finalization of product agreements and project financing. The first phase is scheduled for completion in early 2009 and the facility is slated to commence commercial production in 2011, subject to positive results from the first phase and regulatory approval.

Beaver Hills is an innovative way for Parkland to enhance its long-term supply of gasoline and diesel fuel to better serve our customer base across Western and parts of Eastern Canada.