Quebec heralds billion-dollar natural gas project

Plans to build a $1-billion liquid natural gas terminal and a pipeline network in northeastern Quebec were given the go-ahead on Wednesday by the federal and provincial governments.

Quebec Natural Resources Minister Claude Bchard said the project at Gros-Cacouna, near Rivire-du-Loup, is necessary for the province's natural gas needs.

"Quebec needs natural gas," he told a news conference in Quebec City. "We're at the end of the network, there is less and less gas coming from the West."

Construction of the terminal, which will be done by Transcanada Pipeline and Petro Canadaunder the banner of nergie Cacouna, is expected to take one to two years.

Gas for the Gros-Cacouna terminal will come from Russia and Algeria in tanker ships.

The terminal will transform the gas and ship it by pipeline to Quebec and Ontario markets and for export to the United States.

The project will create 500 direct jobs and another 500 construction jobs.

Local politicians say the project will stimulate economic growth in the region and help stem the tide of young workers leaving for Quebec City and Montreal.

"The direct and indirect jobs will certainly mean a population increase," said Cacouna Mayor Jacques Michaud. "Young people who left will probably return to the region and that's good news for the Lower St. Lawrence."

Many local residents had expressed reservations about the project, citing safety and environmental concerns, however it was approved in a referendum.

The port is expected to serve Quebec, Ontario and the northeastern United States.

But Bchard moved on Wednesday to allay concerns that most of the gas coming through the port would be sold south of the border.

"It is part of the diversification of our sources of energy," he said. "Potentially, there could be some going to the United States, but there is also a need for natural gas in Quebec."

Bchard added that developing a port in Cacouna doesn't hurt the chances of a similar project planned closer to Quebec City.