Re: the Quebec Conference from the Montreal Gazette

Caille touts Quebec gas reserves

Lyne Moore, Montreal Gazette

Once "geological and technical uncertainties" pertaining to unconventional gas reserves in the St. Lawrence lowlands are settled and the resource is proven, Quebec natural gas could generate more jobs and economic benefits than Hydro-Quebec, Andre Caille, the former CEO of the provincial utility told an equally-enthusiastic gathering at Quebec Exploration 2008.

During the annual Quebec Petroleum Society dinner, Caille said that the projected figures related to the gas play "are so big" that he wanted to review them because he was more accustomed to Hydro-Quebec's. He later talked about 1,000 direct jobs and economic spinoffs worth $10-billion in 2007 dollars.

The multi-billion dollar question is not whether there is gas in the lowlands' shale but whether it can be retrieved economically; the first of the answers to those questions - all agree - are months away.

But investment dollars continue to flow into the project that analysts have already described as potentially one of the largest unconventional gas plays in Canada. Part of the interest resides in the fact that Quebec has the lowest gas royalty fees in Canada - 12 per cent - and Alberta's are about to jump to 50 per cent.

This week, a Calgary-based private equity firm paid $3.5 million to junior companies to earn a 60 per cent interest in their exploration permits.

It may rival the largest U.S. onshore gas field - the Texas Barnett shale. Major producers, Talisman and Forest Oil - which says its assets may hold as much as four trillion cubic feet of gas reserves.

An array of test wells have been put down recently and critical results are expected within months.