Canada has reached a deal to export liquefied natural gas (LNG) to Germany from a planned Pacific Coast terminal, an official familiar with the matter said Tuesday. The official confirmed that Canada will sign the agreement with Germany's SEFE group, which stands for Securing Energy for Europe, from the proposed KSI Lisims export facility on the coast of British Columbia. The official spoke on condition of anonymity as they were not authorized to speak ahead of Wednesday's announcement.
Under the deal, up to 1 million metric tons (1.1 million US tons) of LNG per year will be exported. Prime Minister Mark Carney has set a goal to double non-U.S. trade in a decade. Oil and gas-rich Canada currently exports almost all of its energy oil and gas to the United States.
Key Step for Project Development
British Columbia Premier David Eby said earlier Tuesday that a deal to supply Canadian LNG to Germany would be a key step toward the partners behind the Ksi Lisims project deciding to go ahead with their $10-billion Canadian (US$ 7.2 billion) plant and export terminal. Ksi Lisims, located on Pearse Island near the border with Alaska, has the permits it needs, but the consortium has yet to make a final investment decision that would pave the way for construction to begin.
Eby emphasized that securing offtake agreements with buyers is a crucial milestone before Ksi Lisims can proceed. The partnership has already signed supply agreements with a unit of London-based Shell and France-based TotalEnergies.
Germany's Energy Crisis Context
SEFE is a leading German energy utility. It was formerly the German subsidiary of Gazprom, which Germany nationalized in 2022 as Europe struggled with an energy crisis tied to the war in Ukraine and now the Middle East. As European countries supported Ukraine, Russia slashed supplies of natural gas used to heat homes, generate electricity, and power industry, creating an energy crisis that fueled inflation and forced some factories to shut down as prices rose. Germany was a major importer of Russian gas before the war.
