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Methanex Corporation

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EnCana to import diluent through West Coast port

EnCana to tap world diluent supply to help advance oilsands development

CALGARY, Sept. 20 /CNW/ - EnCana Corporation's (TSX, NYSE: ECA) wholly-
owned partnership EnCana Midstream & Marketing has signed an agreement with
Methanex Corporation (TSX: MX) under which Methanex will provide terminalling
services to EnCana at Methanex's terminal facilities in Kitimat, British
Columbia. EnCana plans to import up to 25,000 barrels per day of offshore
diluent to help transport its growing oilsands production in northeast Alberta
to markets in the U.S.
"Diluent is a necessary component for the pipeline transportation of
heavy oil, but Canadian supply is tight due to increased production from
Alberta's vast oilsands. However, cost-effective diluent is readily available
on the world market and this can help us manage transportation costs as we
advance our oilsands growth and integration strategy," said Bill Oliver,
EnCana's President of Midstream & Marketing.
"With access to the ideally-located Kitimat terminal, we expect to be
able to import diluent at a competitive cost and move it to where it's most
needed - in northeast Alberta - then blend it with our growing oilsands
production for transport to key U.S. markets," Oliver said.
In addition to the projected 25,000 barrels per day of additional supply
to be transported from Kitimat, EnCana is close to completing a new
debutanizer installation at its Empress, Alberta natural gas liquids
extraction plant. Planned to come on stream in October, the debutanizer is
expected to generate about 5,000 barrels per day of diluent. The combined
30,000 barrels per day of added diluent expected from these two EnCana
initiatives represents an increase of more than 15 percent to the current
Western Canadian diluent supply.
The Kitimat terminal has an existing dock and tanks at an ice-free port,
plus a railway car loading facility for ease of transport to an Alberta
pipeline connection that feeds EnCana's oilsands operations. EnCana expects to
start importing diluent through Kitimat early in 2006. Under the agreement
with Methanex, EnCana has an option to buy the Kitimat terminal within the
five-year term of the agreement.

EnCana's oilsands market integration strategy
In conjunction with U.S. oil refiner Valero Energy Corporation, EnCana is
conducting a feasibility study into the construction of heavy oil processing
facilities at Valero's existing refinery in Lima, Ohio. The study, which is
expected to be completed over the coming months, will examine the engineering
and economics of EnCana supplying an estimated 200,000 barrels of blended
heavy oil per day to the Lima refinery. The establishment of an offshore
supply of diluent is a key component in EnCana's market integration strategy
which is aimed at maintaining industry-leading low operating costs as the
company expands in-situ oilsands production to an estimated 200,000 barrels
per day over the next several years.

EnCana Corporation
With an enterprise value of approximately US$53 billion, EnCana is one of
North America's leading natural gas producers, is among the largest holders of
gas and oil resource lands onshore North America and is a technical and cost
leader in the in-situ recovery of oilsands bitumen. EnCana delivers
predictable, reliable, profitable growth from its portfolio of long-life
resource plays situated in Canada and the United States. Contained in
unconventional reservoirs, resource plays are large contiguous accumulations
of hydrocarbons, located in thick or areally extensive deposits, that
typically have low geological and commercial development risk, low average
decline rates and very long producing lives. The application of technology to
unlock the huge resource potential of these plays typically results in
continuous increases in production and reserves and decreases in costs over
multiple decades of resource play life. EnCana common shares trade on the
Toronto and New York stock exchanges under the symbol ECA.

providing EnCana shareholders and potential investors with information
regarding EnCana, including management's assessment of EnCana's and its
subsidiaries' future plans and operations, certain statements contained in
this news release are forward-looking statements within the meaning of the
"safe harbour" provisions of the United States Private Securities Litigation
Reform Act of 1995. Forward-looking statements in this news release include,
but are not limited to: future economic and operating performance; projections
relating to diluent price and availability and its impact on transportation
costs; the expected timing and volume of diluent production from the Empress
extraction plant; projected future increases in Western Canadian diluent
supplies; anticipated in-situ oilsands production potential; anticipated costs
and anticipated production growth. Readers are cautioned not to place undue
reliance on forward looking statements, as there can be no assurance that the
plans, intentions or expectations upon which they are based will occur. By
their nature, forward-looking statements involve numerous assumptions, known
and unknown risks and uncertainties, both general and specific, that
contribute to the possibility that the predictions, forecasts, projections and
other forward-looking statements will not occur, which may cause the company's
actual performance and financial results in future periods to differ
materially from any estimates or projections of future performance or results
expressed or implied by such forward-looking statements. These risks and
uncertainties include, among other things: volatility of oil and gas prices;
fluctuations in currency and interest rates; product supply and demand; market
competition; risks inherent in the company's marketing operations, including
credit risks; imprecision of reserves estimates and estimates of recoverable
quantities of oil, natural gas and liquids from resource plays and other
sources not currently classified as proved reserves; the company's ability to
replace and expand oil and gas reserves; its ability to generate sufficient
cash flow from operations to meet its current and future obligations; its
ability to access external sources of debt and equity capital; the timing and
the costs of well and pipeline construction; the company's ability to secure
adequate product transportation; changes in environmental and other
regulations or the interpretations of such regulations; political and economic
conditions in the countries in which the company operates, including Ecuador;
the risk of war, hostilities, civil insurrection and instability affecting
countries in which the company operates and terrorist threats; risks
associated with existing and potential future lawsuits and regulatory actions
made against the company; and other risks and uncertainties described from
time to time in the reports and filings made with securities regulatory
authorities by EnCana. Although EnCana believes that the expectations
represented by such forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to be correct. Readers are
cautioned that the foregoing list of important factors is not exhaustive.
Furthermore, the forward-looking statements contained in this news release are
made as of the date of this news release, and EnCana does not undertake any
obligation to update publicly or to revise any of the included forward-looking
statements, whether as a result of new information, future events or
otherwise. The forward-looking statements contained in this news release are
expressly qualified by this cautionary statement.

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