Energy war drives Germany to Canada's coast for gas supply
For the first time, Canada is set to sell liquefied natural gas directly to Europe.
The deal signals a meaningful shift in global energy trade flows as war and supply disruption push European buyers toward new long-term sources.
Natural Resources Minister Tim Hodgson was set to announce Wednesday in Vancouver a large-scale LNG supply agreement between British Columbia's proposed Ksi Lisims facility and Germany's SEFE, according to sources cited by Reuters.
CBC News reported the deal covers one million metric tonnes per year and is the first of its kind between Canada and Europe.
The agreement moves Ksi Lisims closer to the final investment decision its backers are targeting this year.
BC Premier David Eby said securing offtake commitments is central to that process.
"A major announcement with a European partner of purchasing LNG gets us that much closer," he said.
According to Reuters, Shell and TotalEnergies have already signed 20-year purchase agreements with the facility.
CBC News said the $10bn floating facility, proposed for a site roughly 80 kilometres north of Prince Rupert in Nisga'a Nation territory, carries an export capacity of 12 million metric tonnes per year.
It is being developed by Houston-based Western LNG, the Rockies LNG partnership, and the Nisga'a Nation.
Both the BC and federal governments have named it a priority project, with Prime Minister Mark Carney flagging it for fast-track permitting review.
SEFE, nationalised by Germany for €6.3bn in 2022 after former parent Gazprom exited during Europe's energy crisis, carries a mandate to diversify German energy supply, Reuters reported.
That mandate has grown more urgent since the US-Israel war on Iran drove natural gas prices higher across Europe, with analysts telling CBC News that Canada could emerge as a more significant supplier as a result.
The project, however, faces unresolved legal and environmental challenges.
Alex Walker of Environmental Defence told The Canadian Press the facility "is a high-risk, legally contested fossil fuel project that has failed for decades to attract capital," citing outstanding consent disputes with First Nations.
The 900-kilometre Prince Rupert Gas Transmission pipeline feeding the facility received BC Environmental Ministry approval last June but also faces First Nations opposition, as per CBC News.
Ksi Lisims, SEFE, and Canada's Natural Resources Ministry declined to comment, according to Reuters.
