Encana commissions first liquefied natural gas facility in Alberta

Infrastructure critical to seeding natural gas for transportation market

Calgary, Alberta (January 29, 2013) - Encana Corporation (TSX, NYSE: ECA) today announced the commissioning of its Cavalier liquefied natural gas (LNG) facility located approximately 15 kilometres east of the town of Strathmore, Alberta. The Cavalier LNG facility will play a key role in providing an alternative fuel to diesel for heavy-duty transportation including rail and long-haul trucking. It demonstrates Encana's commitment to lead by example and build the necessary infrastructure to support a transportation future driven by natural gas.

"The Cavalier LNG facility represents a milestone as it will be the first ever in Alberta to offer LNG, a more affordable and cleaner fuel option for the transportation industry," said Eric Marsh, Executive Vice-President, Encana Corporation & Senior Vice-President, USA Division. "This project further demonstrates how Encana has progressed from the concept of a natural gas-based energy portfolio to a business model of safely and efficiently providing the fuel to new markets. There is a very strong value proposition for natural gas use in the transportation sector given that the fuel is 20 to 40 percent less expensive than gasoline or diesel in many regions. In addition to helping realize significant savings on fueling costs, the environmental benefits of using natural gas for transportation speak for themselves, with up to 30 percent less carbon dioxide emissions than oil and 90 percent less smog-causing particulate matter."

The Cavalier LNG facility receives its feedstock from Encana's neighbouring Cavalier gas plant. The natural gas is then treated to remove impurities such as water, carbon dioxide and Mercaptan, and thereafter directed into a cryogenic heat exchanger where liquid nitrogen (-196°C) cools the methane to a liquid state (-160°C). The LNG is stored in cryogenic tanks on-site for truck fueling or bulk tanker loading.

First customers of the Cavalier LNG facility include Calgary-based Ferus Inc., an energy services company specializing in delivering integrated solutions to the energy industry, as well as the Canadian National Railway Company (CN) which last year announced that it is testing two mainline diesel-electric locomotives fueled principally by natural gas. Encana is providing complete LNG fueling solutions to CN for this pilot project including the fuel, transportation and equipment.

The CN project is the first of its kind in Canada. The development of the Cavalier LNG facility allows Encana to continue to work closely with CN and other customers to deliver a more environmentally friendly, reliable and cost-effective fuel for their transportation needs.

"Natural gas is a viable transportation fuel for the rail sector, and CN's pilot project demonstrates the transportation industry's growing awareness of the economic and environmental benefits of natural gas," said David Hill, Encana's Vice-President, Operations, Natural Gas Economy. "There is significant growth potential for natural gas in the transportation sector when you consider the sheer abundance of this resource that has been unlocked in North America through huge technological advances in unconventional production. Combining the on-road trucking with the rail and oil and gas supply chain segments represents around 30 percent, or 22 billion cubic feet per day (Bcf/d), of total North American transportation fuel consumption."

As part of Encana's ongoing efforts to commercially develop natural gas for transportation, the company owns and operates an LNG fueling station in Louisiana, 10 mobile LNG fueling stations and seven compressed natural gas (CNG) stations. In addition, the company is committed to converting its entire fleet of more than 1,300 trucks and passenger vehicles to natural gas. In 2011 alone, the company saved approximately $11 million in fuel costs by using natural gas instead of diesel in company trucks and has converted close to 40 percent of its drilling rigs.

Last month, Encana announced plans to build a 190,000 litre per day LNG production facility near Grande Prairie, Alberta to produce high-quality LNG fuel specifically designed to supply the growing high-horsepower (HHP) market used in drilling rigs, pressure pumping services, and heavy-duty highway and off-road trucks.

"Recent announcements by Westport Innovations and Caterpillar Inc. to jointly develop natural gas technology for off-road equipment validates that the HHP segment is gaining momentum and wide market acceptance across North America," added Hill.

Encana Corporation

Encana is a leading North American energy producer that is focused on growing its strong portfolio of diverse resource plays producing natural gas, oil and natural gas liquids. By partnering with employees, community organizations and other businesses, Encana contributes to the strength and sustainability of the communities where it operates. Encana common shares trade on the Toronto and New York stock exchanges under the symbol ECA.

For convenience, references in this news release to "Encana", the "company", "we", "us", "our" and "its" may, where applicable, refer only to or include any relevant direct and indirect subsidiary corporations and partnerships ("subsidiaries") of Encana Corporation, and the assets, activities and initiatives of such subsidiaries.

Further information on Encana Corporation is available on the company's website, www.encana.com.

Contacts:

Encana Corporation
Jay Averill
Media Relations
(403) 645-4747
Doug McIntyre
Media Relations
(403) 645-6553

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