Canadian Spirit Resources Inc., Calgary, (TSX VENTURE:SPI) (OTCBB:CSPUF) has reported its participation in a water pipeline project that will result in significant cost reductions during the development of the corporation's Farrell Creek Montney play. This project is a joint venture between Canadian Spirit and Canbriam Energy BC Partnership Inc.

The project, to be operated by Canbriam, has approval to deliver up to ten thousand cubic meters of water per day from the Williston Reservoir to the Farrell Creek/Altares area in northeastern British Columbia on a year-round basis over the next twenty years. CSRI will retain a 25% working interest in the water pipeline project with Canbriam holding a 75% working interest.

Once in operation, the project will materially reduce the cost of delivering a secure supply of water used in the stimulation of horizontal wells and will lessen the impact on local communities and infrastructure by reducing the need to transport water overland to drilling sites. All approvals for the construction and operation of the Project are in place.

"This strategic infrastructure Project is an integral part of the longer term development and expansion of the Montney play at Farrell Creek with significant safety and environmental benefits for the surrounding communities," says Don Gardner, Canadian Spirit's CEO. "The cost savings and operating efficiencies expected to be realized by the participants in this Project will materially contribute to the economic value of their Montney assets in the Farrell Creek/Altares area and ensure that this remains one of the low cost natural gas plays in North America."

The Canbriam/CSRI joint venture expects this project to be fully operational by year-end 2011. CSRI has included its expected share of the cost of the project in its capital budget for the balance of 2011.