Kelso Technologies Inc.
TSX VENTURE : KLS
OTCQX : KEOSF
PINK SHEETS : KEOSF

Kelso Technologies Inc.

September 15, 2011 09:00 ET

Kelso Technologies Inc.: Progress Report

VANCOUVER, BRITISH COLUMBIA and LISLE, ILLINOIS--(Marketwire - Sept. 15, 2011) - Kelso Technologies Inc. (TSX VENTURE:KLS)(OTCQX:KEOSF)(PINK SHEETS:KEOSF) (The "Company" or "Kelso") Kelso reports that as a new member of the Railroad Supply Institute ("RSI") it will presenting its products (Booth #3152) at the RSI's Railroad Interchange 2011 show in Minneapolis from the 18th to the 20th of September. There are over 4,400 attendees expected to visit the show and our participation is strategic a part of our ongoing new product marketing program.

The Company is currently marketing its full line of external constant force pressure relief valves ("valve") products and the new Kelso Klincher ™ ("KKS") manway securement system to a wide range of large companies involved in the transportation of hazardous materials such as ethanol, crude oil, oil shale, oil sand, toxic chemicals and liquid fertilizers. Discussions on specific engineering design criteria, testing requirements, retrofit strategies, production schedules and adoption strategies are ongoing with multiple customers at this time. This is a complex and time consuming process but an essential prerequisite to customers' future adoption plans.

Kelso must educate, demonstrate and confirm that the value proposition being offered by its KKS product is attainable and sustainable in terms of regulatory compliance, reliability, longevity, effectiveness, efficiency and economic benefits. KKS prototypes are in use or being scheduled in "live" full load service by various customers as a concluding step in their adoption decision and purchase orders.

The key issue in our business infrastructure investment is our ability to produce products at a rate that can reliably service tank car manufacturers' ("OEM") requirements. Currently, OEM demand for our products can reach 6,500 to 9,000 units annually. OEM and retrofit/repair markets could push demand up to 12,000 units annually in 2014.

Given the size of the market Kelso must expedite the growth of its production capacity in order to gain OEM confidence to supply their business operations. It is expected that this will take Kelso up to 18 to 24 months to reach full productive capability.

The strategic plan for production is being implemented in Bonham, Texas which is a short distance from our key customers. Assembly Plant No. 1 came into production in January 2011 and is used to produce up to 4,000 valve units annually. The facility can handle the current demands of customers.

Assembly Plant No. 2 in our recently purchased building in Bonham will be used for the initial production of the KKS. The facility is on schedule for production in January 2012. All new suppliers have been engaged and required tooling is in process. The project is on time and budget. This plant along with outsource supply is expected to produce up to 2,400 KKS units per year.

Assembly Plant No. 3 is being designed for full production and distribution to the North American marketplace. It is expected to be a 30,000 - 40,000 square foot assembly plant producing all Kelso products under a single roof. It is in the planning stages and is expected to be built and in production in 2012. Its production capability will be scalable up to 12,000 valve and 12,000 KKS units annually. The land has been secured and construction and financing arrangements have been agreed to with strategic partners in Bonham. This plant will be able to handle all the product needs of all customers in North America including all OEM requirements.

About Kelso Technologies

Kelso supplies innovative technologies aimed at the safe containment of hazardous materials during transport. Our primary goal is to have our technologies improve the safety industry workers and the environment while providing substantial returns on investment to our customers and investors worldwide.

The Company designs, engineers, markets, sells, produces and distributes a series of industrial products based on patented technologies including external constant force pressure relief valves and a new unique manway product that are both designed to reduce the risk of environmental harm due to non-accidental events in the transportation of hazardous commodities in North America.

Kelso is focused on the full scale commercial business development of its proprietary technologies. With the eventual economic recovery in North America, the enforcement of more stringent United States and Canadian environmental regulations and the adverse effects of wear and tear on existing railroad fleets management expect that the railroad industry will rebound significantly. Management is confident that it can pursue a meaningful and profitable revenue stream from a market made up of new tank-car builders, major chemical shippers, repair shops and retrofitters. The Company will update, by way of news releases, progress reports in the future.

For a more complete business and financial profile of the Company, management encourages interested parties to view the Company's website at www.kelsotech.com and public documents posted on www.sedar.com.

On behalf of the Board of Directors

James R. Bond, CEO and President

Legal Notice Regarding Forward Looking Statements: This news release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Forward-looking statements are indicated expectations or intentions. Forward-looking statements in this news release include that OEM demand for our products can reach 6,500 to 9,000 units annually and with retrofit/repair markets could push demand up to 12,000 units annually in 2014; that it will take Kelso up to 18 to 24 months to reach full productive capability; that assembly plant #2 is on schedule for production in January 2012 is expected to produce up to 2,400 KKS units per year; that assembly plant #3 is expected to be built and in production in 2012 and have production capability scalable up to 12,000 valve and 12,000 KKS units annually, and will be able to handle all the product needs of all customers in North America including all OEM requirements; that the railroad market will rebound significantly and that a large market of potential customers exists. The Company's products involve detailed proprietary and engineering knowledge and specific customer adoption criteria, hence factors that could cause actual results to be materially different include that we may be unsuccessful in raising any additional capital needs that may arise; we may not have sufficient capital to develop, produce and deliver new orders; orders that are placed may be cancelled; product may not perform as well as expected; markets may not develop as quickly as anticipated or at all; or that the construction or other plans for plants run into permit, labor or other problems. Further, we are reliant on certain key employees who may leave the Company and we may be unable to protect or defend our intellectual property. Investors are cautioned against placing undue reliance on forward-looking statements. We assume no responsibility to update these forward looking statements except to the extent required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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