Gaz Métro relies on the use of liquefied natural gas in the heavy transportation sector

Natural gas: An economical and environmental alternative to traditional fuels

MONTREAL, Feb. 4, 2013 /CNW Telbec/ - Gaz Métro is proud to take stock of its achievements in line with its liquefied natural gas (LNG) development plan. The goal of this plan is to supply LNG to the heavy transport industry in Quebec and eastern Canada, via its indirect subsidiary Gaz Métro Transport Solutions, LP (GMTS), and subsequently to assess the possibility of hauling LNG by truck to service more remote areas from Gaz Métro's natural gas pipeline network.

Accordingly, GMTS has been working with a number of partners and road transportation companies since 2010 to ensure that local carriers can enjoy the significant economic and environmental advantages of LNG, compared with diesel fuel. GMTS is playing a pivotal role as an expert and leader in the planning and implementation of initiatives designed to develop LNG-powered fleets. In addition, GMTS owns and operates two private fuelling stations in Quebec, on Robert Transport sites: one on the South Shore of Montreal and the other (a mobile unit) in the Quebec City area. It also owns and operates a third fuelling station in the Mississauga area.

Achievements and current projects

In the heavy transportation sector, as a result of infrastructure investments made by GMTS (fuelling stations):

• Transport Robert 1973 Ltd. (Robert Transport) plans to have 130 LNG-powered trucks (out of a total 180 trucks ordered) on the road by early summer 2013.
• Transport YN.-Gonthier Inc. introduced its first two LNG trucks in October 2012.
• A first for eastern Canada: Camions Excellence Peterbilt Inc. now has one LNG-fuelled truck available for short-term rentals.

In the marine transportation sector:

The Société des traversiers du Québec (STQ) has announced the purchase of three LNG-powered ferries, which will be able to procure natural gas through GMTS:

• One ferry for the Matane-Baie-Comeau-Godbout crossing
• Two ferries for the Tadoussac-Baie-Sainte-Catherine crossing.

In the rail transportation sector:

• GMTS is supplying LNG as part of a project to develop an LNG-powered locomotive, in collaboration with Westport Innovations, CN and Electro-Motive Diesel, Inc. (EMD).

Projects in development

• GMTS is in talks with several carriers interested in ordering LNG trucks in the coming months.
• A series of public fuelling stations will be set up along highways 20 and 401 to strengthen and complement the existing private network. This public network may also eventually merge with the North American network, thereby enabling carriers to provide continent-wide coverage using natural gas-fuelled vehicles. The first step will entail setting up public stations in Rivière-du-Loup, Lévis and Cornwall, which are expected to be operational by the end of 2013. Two mobile fuelling stations have been ordered to accelerate the process. During the second phase, two additional public stations will be incorporated into the network: one east of Toronto and the other south of Montreal.

Catering to the increased demand for LNG

Given the projected rapid growth in market demand for LNG, specifically from the perspective of GMTS to which Gaz Métro provides liquefaction services, Gaz Métro is currently looking into several solutions for improving the availability of LNG in Quebec, including increasing liquefaction output, either by itself or via a subsidiary, directly through its liquefaction, storage and regasification (LSR) plant. This would be contingent on the findings of the requisite financial studies in terms of project feasibility and, eventually, on the outcome of the appropriate regulatory processes. The LSR plant, which supplies Gaz Métro customers during peak periods, is located in the east end of Montreal and has been operating for more than 40 years. As the present storage capacity of the two existing reservoirs easily meets current customer demand, Gaz Métro is now working on the front-end engineering design (FEED) for a project focusing solely on increasing liquefaction capacity to accommodate LNG needs. This should be finalized by the end of March. Following this, provided that major contractual agreements are signed with such clients as GMTS, a request for proposals may follow in April for the engineering, procurement and construction (EPC) of an additional liquefaction unit.

The environmental advantage of natural gas

The transport industry is Quebec's leading producer of greenhouse gas (GHG) emissions. In 2009, it accounted for 43.5% of the total emissions generated. Road freight transportation via heavy diesel vehicles is responsible for 30.3% of this figure, making it a key target for GHG reduction efforts. Natural gas, which emits up to 25% less GHG emissions than diesel, is the alternative of choice.

The economic advantage of natural gas

Fuel represents one of the transportation industry's biggest expenses, and the cost of natural gas can be up to 40% less than diesel. By using natural gas to meet their fuel needs, companies can reduce their operating expenses at the same time as they improve their environmental footprint.

About Gaz Métro Transport Solutions
Gaz Métro Transport Solutions (GMTS) is an indirect subsidiary of Gaz Métro, Quebec's leading natural gas distributor. GMTS was created to encourage the transportation industry to switch to natural gas, the only available alternative to diesel. GMTS is committed to developing a market in Quebec for compressed and liquefied natural gas as a source of fuel. Natural gas is a more economical choice and generates less greenhouse gas emissions than diesel. It therefore has enormous potential for the transportation industry from a commercial standpoint. www.gazmetrost.com

About Gaz Métro
With over $5 billion in assets, Gaz Métro is a leading energy provider. It is the largest natural gas distribution company in Quebec, where its 10,000-km underground network of pipelines serves 300 municipalities and more than 185,000 customers. Gaz Métro is also present in Vermont, producing electricity and distributing electricity and natural gas to cater to the needs to some 300,000 customers. Gaz Métro is actively involved in the development of innovative, sustainability-oriented energy projects such as the production of wind power, the use of natural gas as a transportation fuel and the development of biomethane as a renewable energy source. Gaz Métro is committed to ensuring the satisfaction of its customers, providing support to businesses, local organizations, families and communities, and meeting the needs of its partners (Gaz Métro inc. and Valener) and employees. www.gazmetro.com

Cautionary note regarding forward-looking statements
This press release may contain forward-looking information within the meaning of applicable securities laws. Such forward-looking information reflects the intentions, plans, expectations and opinions of the management of GMi, in its capacity as General Partner of Gaz Métro, and acting as manager of Valener (the management of the manager) and is based on information currently available to the management of the manager and assumptions about future events. Forward-looking statements can often be identified by words such as "plans," "expects," "estimates," "forecasts," "intends," "anticipates" or "believes" or similar expressions, including the negative and conjugated forms of these words. Forward-looking statements involve known and unknown risks and uncertainties and other factors beyond the control of the management of the manager. A number of factors could cause the actual results of Valener or of Gaz Métro to differ significantly from current expectations, as described in the forward-looking statements, including but not limited to the general nature of the aforementioned, terms of decisions rendered by regulatory agencies, the competitiveness of natural gas in relation to other energy sources, the reliability of natural gas and electricity supply, the integrity of the natural gas and electricity distribution systems, the ability to complete attractive acquisitions and the related financing and integration aspects, the ability to secure future financing, general economic conditions, exchange rate and interest rate fluctuations, weather conditions and other factors described in the Risk Factors Relating to Valener and the Risk Factors Relating to Gaz Métro sections of Valener's and Gaz Metro's MD&As for the year ended September 30, 2012 and in Valener's disclosure filings. Although the forward-looking statements contained herein are based on what the management of the manager believes to be reasonable assumptions, including assumptions to the effect that no unforeseen changes in the legislative and regulatory framework of energy markets in Quebec and in the New England states will occur; that the applications filed with the Régie, in particular the rate applications and the authorized return on deemed equity application will be granted as filed; that natural gas prices will remain competitive; and that no significant event occurring outside the ordinary course of business, such as a natural disaster or other calamity, will occur; in addition to the other assumptions described in the Valener and Gaz Métro MD&As for the quarter ended December 31, 2012, the management of the manager cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of this date, and the management of the manager assumes no obligation to update or revise them to reflect new events or circumstances, except as required pursuant to applicable securities laws. Readers are cautioned to not place undue reliance on these forward-looking statements.

SOURCE: GAZ METRO