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The Lowlands are situated in Quebec, south of the St. Lawrence River between Montreal and Quebec City. Building a circular economy on a significant discovery on Quebec Utica could result in the second lowest supply gas cost in North America.
The Company’s primary objective remains the implementation of a business and political solution for the development of its natural gas discovery in the province. Concurrently, it is protecting its legal rights following the enactment in August 2022 of Bill 21, An Act mainly to end petroleum exploration and production and the public financing of those activities in Quebec (“Bill 21”).
In February 2024, the Company submitted its application for a carbon storage pilot project to the Quebec Ministry of Economy, Innovation and Energy under Bill 21. The project includes a comprehensive program to assess the carbon storage potential including injection and monitoring wells, compression facilities and a pipeline to an adjacent industrial park. This included infrastructure will facilitate the transition to a commercial project.
Through the Quebec Energy Association, the Company participated in the public consultation for Bill 69, An Act to ensure the responsible governance of energy resources and to amend various legislative provisions introduced in June 2024. The centerpiece of the proposed legislation is an integrated resource management plan to promote energy development in Quebec. Among other things, it will establish for electric power and natural gas markets, policy directions, objectives and targets regarding supply, energy infrastructure and innovation.
Following the permission granted to the Attorney General of Quebec to appeal the Quebec Superior Court (Civil Division) ruling in January 2024 suspending key provisions of Bill 21 pending a hearing on the merits of the case, Questerre and other license holders filed a joint motion for review and annulment of the judgement granting the application for the leave to appeal (the “Motion”). In October 2024, the Quebec Court of Appeal heard the Motion and the appeal by the Attorney General. The Company is awaiting a decision from the Court of Appeal.
In October 2024, in connection with its claim against the Government of Quebec, the Company filed an independent report on potential economic losses. Based on the scope and subject to the restrictions, qualifications and major assumptions, under various scenarios, all of which are set out in the report, the report estimates the economic losses if the licenses are successfully revoked under three different scenarios with estimates ranging from $700 million to $4.8 billion. Please refer to our press release of October 3, 2024. A copy of the report is available on the disclosure system in Norway and on SEDAR+ in Canada.
The Company is proceeding with the main hearing on the merits of the case in accordance with procedural rules in Quebec, including its debate on the constitutional validity of Bill 21. The questioning of key Government representatives is expected to take place this summer to be followed by the establishment of a trial date for the hearing.
