Value chain

This section sets out the major phases in the natural gas value chain, and the role that Gaz Métro and its affiliates play in each phase. The graphic also provides some examples of actions that Gaz Métro has taken in the last two years to create added value for its stakeholders.
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The natural gas consumed in Québec is purchased from two gas hubs: Empress, in Alberta, and Dawn, in Ontario. These hubs in turn are supplied by production basins located in Canada and the United States: Western Canada Sedimentary Basin, U.S. Rockies, Mid-Continent, Marcellus, and Gulf of Mexico. A small quantity of natural gas originates from Québec and is produced by means of waste reclamation (biomethane).

Gaz Métro’s role
Gaz Métro purchases natural gas mainly from intermediaries such as energy brokers and the subsidiaries of large banks that are active in the energy field. Gaz Métro purchases approximately 39% of the natural gas it distributes. The remainder of the distributed natural gas is purchased directly by customers. For more information, see the Natural gas supply section.

Gaz Métro actions in this phase
Responsible procurement approach: Gaz Métro’s current and potential natural gas suppliers are assessed based on the criteria used to select goods and services suppliers (first-level assessment of business practices). To see the criteria, please consult the Supplier Code of Conduct.
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To reach Gaz Métro’s territory, natural gas is transported over long distances by the network of natural gas carriers.

Gaz Métro’s role
Gaz Métro has transportation contracts with TransCanada PipeLines Limited (TCPL), which delivers the majority of the natural gas volumes to the Gaz Métro network. This type of transaction accounts for approximately 2.3% of the natural gas volumes distributed by Gaz Métro (5.2 petajoules) to approximately 68 customers. Gaz Métro has direct or indirect holdings in three natural gas transportation corporations, TQM, Champion Pipeline Ltd. and Portland Natural Gas Transmission System.

Gaz Métro actions in this phase
In the last several years, Gaz Métro has increased the proportion that it procures from the Dawn natural gas hub in Ontario, and reduced its purchases from Alberta’s Empress hub.  Procuring natural gas closer to where it is consumed in Quebec reduces the transportation distances, and therefore decreases the environmental footprint of this phase in the natural gas life cycle. On November 1, 2016, Gaz Métro will reach an important threshold in its procurement decisions.  As of that date, more than 89% of Gaz Métro’s transportation capacity will be between Dawn and Gaz Métro’s territory, with less than 10% starting at Empress.  For more information, please see Natural gas supply.
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To balance the supply, natural gas is stored and injected into the network when needed.  Gaz Métro uses a storage site that belongs to Union Gas Limited (Union Gas), located in Dawn, Ontario, and three Quebec-based sites: two sites that belong to Intragaz LP (Intragaz) (Pointe-du-Lac and Saint-Flavien) and its natural gas liquefaction, storage and regasification plant (Gaz Métro’s LSR plant).

Gaz Métro’s role
Gaz Métro has underground storage contracts with suppliers, including Intragaz, in which it has indirect holdings.  It can therefore cyclically inject and remove natural gas volumes.  The LSR plant belongs to Gaz Métro, which has full operational control over it.

Gaz Métro actions in this phase
Natural gas distribution is highly seasonal, with most natural gas deliveries occurring during the winter.  Also, during the winter months, the daily demand for natural gas fluctuates with the temperature.  In this context, Gaz Métro uses storage facilities to:  
  • receive natural gas shipments during the summer, under good conditions, and distribute natural gas during the winter;
  • balance natural gas demand and shipment on a daily basis;
  • mitigate the possibility of a natural gas supply shortage; and
  • more efficiently manage the cost of natural gas during the winter months.
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Natural gas distribution

Once at the distribution network, which covers more than 10,000 kilometres, the natural gas passes through delivery stations, where it is measured and odorized, and its pressure is decreased.  It then goes through regulator stations, which lower the pressure again before it is delivered to the customer's facilities.  Gaz Métro operates 78 delivery points and 492 regulator stations. Gaz Métro distributes approximately 97.0% of the natural gas consumed in Québec.

Gaz Métro’s role
Gaz Métro operates and runs all of the natural gas distribution infrastructure in its territory and is in full control of this phase of the natural gas value chain.  

Gaz Métro actions in this phase
Gaz Métro's primary objective in operating its network is to provide its customers with a reliable, safe supply of natural gas. To accomplish this, it makes ongoing efforts to protect installations through rigorous maintenance and network improvement programs. Gaz Métro carries out an annual preventive maintenance program for its network. It has had no significant leak or spill of hazardous materials or contaminants in the last five fiscal years.  For more information, click here to view the section on Contaminant leaks and spills.
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Consumption of natural gas

Gaz Métro serves over 197,250 Québec customers in three markets.


139,931 customers
9.9% of volume (567 M m3)
20.2% of revenue
49,552 customers
30.2% of volume (1,728 M m3)
44.5 % of revenue
7,767 customers
59.9% of volume (3,425 M m3)
35.3% of revenue

Gaz Métro’s role
Gaz Métro wants to help its customers consume better, so it has deployed energy efficiency assistance programs.

Gaz Métro actions in this phase
Energy efficiency: Thanks to more than 15 million dollars in financial assistance, Gaz Métro’s energy efficiency programs helped customers carry out 4,167 projects and generate savings of more than 42 million cubic metres of natural gas in fiscal 2015, yielding an annual greenhouse gas reduction of 80,846 tonnes.  This is the best annual result since the energy efficiency programs were implemented over 15 years ago.  Over the lifespan of the energy efficiency measures applied, these reductions will save over 160 million dollars.
Since 2001, the 111,469 energy efficiency projects fostered by Gaz Métro programs have saved nearly 420 million cubic metres of natural gas, representing a 803,740-tonne reduction in greenhouse gas emissions on Quebec’s environmental report card.
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Energy services

Some Gaz Métro affiliates sell goods and services in the energy field, including sales, leasing and maintenance services for equipment that runs on natural gas; or they sell liquefied natural gas as fuel for transportation; or they distribute liquefied natural gas to customers not served by Gaz Métro’s distribution network.

Gaz Métro’s role
Some affiliates have their own management teams, such as Gaz Métro Plus and Gaz Métro Transport Solutions (GMTS); Gaz Métro Liquefied Natural Gas (Gaz Métro LNG), for example, has entered into a management agreement with Gaz Métro to run its operations. Our subsidiary, Gaz Métro Plus Limited Partnership, also has a separate team.  Gaz Métro also has indirect holdings in an affiliate, Climatisation et chauffage urbains de Montréal, which runs the thermal plant that supplies heating and air conditioning to downtown Montreal.

Gaz Métro actions in this phase
Natural gas as fuel: Whether liquefied or compressed, natural gas is a proven, efficient, forward-looking solution, in particular for fleets of waste collection trucks.  Quebec currently has 22 refuelling sites and 630 vehicles that run on natural gas. They belong to businesses, municipalities, and Gaz Métro. In fiscal 2015, this fuel replaced 14.8 million litres of diesel.

Liquefied natural gas in the maritime industry: In July 2015, the Société des traversiers du Québec put the F.-A. Gauthier into service, North America’s very first liquefied natural gas powered ferry.

Off-network natural gas: Since it is now available in territories that are usually restricted to petroleum products because they are so remote from the natural gas network, liquefied natural gas (LNG) is helping the regions to become more build prosperous.  It allows businesses to stay competitive and may be a key factor in bringing in new players.  This is the case with Stornoway Diamond, which will be the first Quebec mining firm to use LNG as of 2016.

See the Growth and development section for more information.
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Technological innovation 

Gaz Métro is an important member of a technological development organization that is unique in Canada, the Natural Gas Technologies Centre (NGTC).

Founded in 1992, NGTC is a non-profit organization that engages in:
  • technological development
  • assessment of energy performance
  • technological transfer
  • technology watch
in the fields of:
  • classic natural gas
  • renewable energies combined with natural gas
  • production of renewable natural gas
Moreover, Gaz Métro relies on the DATECH Group, a group of specialized Gaz Métro engineers who work closely with commercial representatives to offer customers the technological solutions that are most efficient and best suited to their needs.

Gaz Métro’s role
Gaz Métro strives continuously to find ways to optimize the use of natural gas.

Gaz Métro actions in this phase
Minimalist ducts in dwellings:
A joint DATECH Group-NGTC project to develop a concept based on the use of minimalist ducts to save space at both ceiling and floor level, and enable comfort and optimized heating. Click here for more information.

Energy performance calculation tool: In collaboration with NGTC, design of a tool to calculate the energy performance of steam boilers.  The tool also makes it possible to calculate the energy savings for the five most popular measures for a boiler room.  

Second-generation renewable natural gas: NGTC demonstration testing for producing renewable natural gas from forest waste.

Natural gas as fuel:
DATECH Group supported two development and demonstration projects involving hybrid diesel-natural gas technologies applicable in the truck and heavy equipment market.
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Support for business activities 

Gaz Métro’s role
Gaz Métro continuously strives to create value for its economic partners, staff, customers and the community.

Gaz Métro actions in this phase
Code of Ethics update: Beyond setting out commitments, principles and rules, the Gaz Métro Code of Ethics must be put into daily practice so it becomes integrated with individual behaviours and embedded in the corporate culture.  In 2015, a deployment plan helped to equip Gaz Métro employees better in this regard.

Customer satisfaction: In 2015, the result for the customer satisfaction index was 93.8%.

Organizational commitment: Gaz Métro’s global index for employee engagement  reached excellence territory in 2015, according to the results of the SECOR/KPMG survey on engagement.  

“Ready for Next” campaign: Over 150 employees participated in the brainstorming session on the energy solutions of the future.  For Gaz Métro employees, “next” means sustainable energy solutions that are responsive to the climate change issue and the imperative of reducing our greenhouse gas emissions.

Community involvement: In fiscal 2015, under its community investment policy, Gaz Métro reallocated over 1% of its before-tax profits, 1.59 million dollars, to nearly 200 organizations.  
Also in fiscal 2015, in the framework of the “Effet A” project, Sophie Brochu and her team raised nearly 100,000 dollars through the Soupe pour elles initiative on behalf of the organization Herstreet.
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