Junex

Unconventionalnatural gas reserves in the St. Lawrence Lowlands could generate morejobs and economic benefits for the province than Hydro-Québec does, aformer president of the provincial utility told an equally enthusiasticgathering at Quebec Exploration 2008 yesterday.

The projectedfigures for the Utica shale gas play "are so big," Hydro-Québec'salmost pale in comparison, said André Caillé, the onetime Hydro boss.Caillé, also a former CEO of Gaz Métropolitain, now is a senior adviserfor Junex, one of the junior companies with extensive holdings in thelowlands.

"The Utica shale (gas) is something that could be very very significant for Quebec, economically and socially," he said.

Gaswells in those fields could generate 10,000 direct jobs and $10 billionin economic spinoffs, Caillé said Wednesday at the annual dinner of theCIM Petroleum Society's Quebec branch.

The multibillion-dollarquestion is not whether there is gas in the lowlands - a broad swathof territory that runs between Montreal and Quebec City - but whetherit can be retrieved economically, Caillé and others said during thefour-day conference, which wrapped up yesterday.

U.S.-ledadvances in technology and horizontal drilling techniques make iteasier and more profitable for producers to exploit shale formations,but costly testing is still needed in Quebec, said Michael Binnion, anexecutive with Calgary-based Questerre Energy. "High risk, high reward"defines the St. Lawrence Lowlands play, Binnion said during theconference.

A recent report from Calgary-based Triston Capitalsaid it believes the lowlands could contain as much as 40 trillioncubic feet of recoverable gas, making it one of the largestunconventional gas plays in Canada. But the project is still in itsinfancy and technical challenges remain, the report said.

Therule of thumb is one trillion cubic feet of gas is worth $6 billion -if you can pump it out, said Raymond Savoie, president of Gastem,another Quebec-based junior with extensive land holdings in the region.

Major producers Talisman Energy and Forest Oil have bought into the play and are involved in field work.

Thisweek, Canbriam Energy of Calgary paid $3.5 million to Quebec-basedPetrolympic Ltd. and its joint venture partner Ressources et ÉnergieSquatex Inc. for an interest in their land holdings, which includepositions in the lowlands.

lmoore@thegazette.canwest.com