QUÉBEC, March 20, 2012 /CNW Telbec/ - Gaz Métro is delighted with the measures announced earlier today by Raymond Bachand, Québec Minister of Finance, aimed at enabling the Côte-Nord to have access to natural gas. "We salute the leadership of the government and we enthusiastically look forward to making this source of competitive energy available to Côte-Nord enterprises and, at the same time, helping Québec improve its environmental balance sheet," said Sophie Brochu, President and Chief Executive Officer of Gaz Métro.
At the request of multiple stakeholders, Gaz Métro has been studying the technical and economic feasibility of supplying the Côte-Nord with natural gas for some time. Its coming would contribute to the development of the region by offering a more competitive energy solution for industries, businesses and institutions. Also, converting from fuel oil to natural gas would eliminate almost 93% of the pollutants and particles that cause smog as well as acid rain, and reduce greenhouse gases (GHGs) by 31%. If all the fuel oil presently consumed on the Côte-Nord were replaced by natural gas, this would translate into an annual reduction of 150,000 tonnes of GHGs.
The preferred supply option, which is the subject of studies, is to connect the industrial sectors of Baie-Comeau, Port-Cartier and Sept-Îles to the existing natural gas distribution network, a project estimated at about $750 M. This scenario would involve the construction of a pipeline between Jonquière and Sept-Îles, along a route yet to be established, as well as installations to serve each of the three major industrial regions.
The government support announced this afternoon for the draft-design period will cover 75% of the costs of conducting environmental studies and doing the engineering work, estimated at about $40 M, between now and spring 2013. In order to be able to serve the Côte-Nord by 2015-2016, these studies have to begin as soon as possible. They will therefore be done in parallel with the regulatory applications, which are pre-requisites to signing any definite agreements with future Côte-Nord customers.
"As a natural gas distributor, Gaz Métro has to ensure that projects to extend its network achieve a balance between the costs that have to be carried by current customers and by future customers in the newly served regions. Gaz Métro will work closely with the Québec government to ensure that the cost of natural gas delivered to the Côte-Nord is competitive when the pipeline is put into service and also that there is no undue tariff increase for current Gaz Métro customers," added Sophie Brochu.
Several regulatory steps are required and various permits and authorizations will be necessary throughout the different stages of development of this significant network extension project. As it does for all its projects, Gaz Métro maintains and will maintain regular communications with the various stakeholders concerned.
Overview of Gaz Métro
With over $3.7 billion in assets, Gaz Métro is Quebec's leading natural gas distributor. Its 10,000 kilometre network serves 300 municipalities. Gaz Métro has operated in this regulated industry since 1957 and is the trusted energy provider of its customers in Quebec and Vermont, who choose natural gas for its competitive price, efficiency, comfort and environmental benefits. Gaz Métro is also present in the electricity distribution market, natural gas transportation and storage, the development of innovative energy projects such as wind power, natural gas as fuel for the transportation industry and biomethanation. Gaz Métro is committed to the satisfaction of its customers, Partners (Gaz Métro inc. and Valener Inc.), employees and the communities it serves. www.gazmetro.com
Cautionary note regarding forward-looking statements
Certain statements contained in this press release may be forward-looking pursuant to applicable securities laws. Such forward-looking statements reflect the intentions, plans, expectations and opinions of the management (the "Management") of GMi and are based on information currently available to Management and assumptions about future events. Forward-looking statements involve known and unknown risks and uncertainties and other factors outside GMi's or Gaz Métro's control. A number of factors could cause actual results of GMi and Gaz Métro to differ materially from the current expectations as expressed in the forward-looking statements. Although these forward-looking statements are based upon what Management believes to be reasonable assumptions, GMi and Gaz Métro cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and GMi and Gaz Métro assume no obligation to update or revise them to reflect new events or circumstances, except as required pursuant to applicable securities laws. You are cautioned not to place undue reliance on these forward-looking statements. The complete version of the cautionary note regarding forward-looking statements as well as a description of the relevant assumptions and risk factors likely to affect GMi's and Gaz Métro's actual results are included in the Management's Discussion and Analysis for the year ended September 30, 2011 of GMi and Gaz Métro, and in GMi's disclosure filings. These documents are available on SEDAR at www.sedar.com.
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