Canada is preparing to announce a deal to supply Germany with liquefied natural gas (LNG) from a planned export facility in British Columbia, according to sources close to the situation. The gas will be transported fro...
Canada is preparing to announce a deal to supply Germany with liquefied natural gas (LNG) from a planned export facility in British Columbia, according to sources close to the situation.
The gas will be transported from the Ksi Lisims project, a C$10 billion (around $7.3 billion) floating export facility that has already received the necessary approvals. These sources requested anonymity as the details are still confidential.
The buyer will be SEFE, which was previously part of Gazprom PJSC and was nationalized by the German government after the Ukraine crisis. The announcement is expected to be made on Wednesday by Tim Hodgson, Canada’s Minister of Energy and Natural Resources.
Ksi Lisims LNG is supported by Western LNG, funded by Blackstone Inc., as well as Rockies LNG Partners and the Nisga’a Nation, an Indigenous group that owns the land for the facility.
Construction has not yet officially started as the project has not reached a final investment decision. The facility aims to produce 12 million metric tons of LNG per year, making it nearly as large as the first phase of the LNG Canada project, which was launched last year.
Officials from SEFE, Western LNG, and the Canadian government declined to comment, and representatives from Rockies LNG Partners and the Nisga’a Nation did not respond immediately to requests for comments.
In a recent interview, Hodgson mentioned that European countries are actively seeking dependable gas supplies to replace imports from Russia and the Middle East, which have been impacted by conflicts.
He noted that European nations do not want to be overly dependent on U.S. gas. This is partly due to past trade tensions with the Trump administration and the desire for a diverse range of energy suppliers.
“We can be that alternative,” Hodgson stated. “We can be that reliable supplier who won’t use energy as a tool of coercion.” Future options may include LNG being sent via Canada’s east coast or through Hudson Bay, but for now, there will be significant increases in supply from the west coast, which is promising for European buyers.
When asked if west coast LNG would reach Europe via the Panama Canal, Hodgson explained that there are various transportation options. “Some ships will go through Panama, some will take the long way, and some will trade for LNG available elsewhere,” he explained.
Ultimately, Hodgson stressed the importance of Canada and Europe strengthening their energy partnership, especially as global powers are increasingly using trade as a means of geopolitical pressure.
“They are asking themselves how to create energy security,” he said. “They are looking for suppliers who share their values, and they find few options.”