Canada is set to announce a deal to supply Germany with liquefied natural gas from a planned export facility on the coast of British Columbia, according to people familiar with the matter.
The gas will be shipped from the Ksi Lisims project, a C$10bn ($7.3bn) floating export facility that has already received regulatory approval, said the people, speaking on condition they not be identified because the matter is still private.
The buyer is Germany’s SEFE, the former Gazprom PJSC unit nationalised by the German government after the invasion of Ukraine. The deal is expected to be announced today by Tim Hodgson, Canada’s minister of energy and natural resources.
Ksi Lisims LNG is backed by Blackstone Inc.-funded Western LNG, as well as Rockies LNG Partners and the Nisga’a Nation, an Indigenous group that owns the development land.
The project has not yet reached a final investment decision to start construction. The investor group is planning a facility capable of producing 12mn metric tonnes a year of LNG — making it nearly as large as the first phase of LNG Canada, a Shell Plc-backed project that went into operation last year.
Officials with SEFE, Western LNG and the Canadian government declined to comment. Representatives for Rockies LNG Partners and the Nisga’a Nation didn’t immediately respond to requests for comment.
Hodgson, speaking in a recent interview with Bloomberg News, said European nations are actively looking for a reliable supply of gas to replace flows from Russia and the Middle East, which have been disrupted by war.
European countries don’t want to become overly reliant on American gas, Hodgson said — partly because of trade tensions with the Trump administration but also because they want the security of having a range of suppliers.
“We can be that alternative,” Hodgson said. “We can be that reliable supplier who will not use energy for coercion.” That could eventually take the form of LNG being shipped via Canada’s east coast or through Hudson Bay in the north, but in the near term, “we have huge increases in supply coming off the west coast, which are music to their ears.”
Asked whether west coast LNG would be shipped to Europe through the Panama Canal, Hodgson said there are multiple options. “Some ships will go through Panama, some will go around, some they’ll just trade” in return for LNG shipments available elsewhere, he said.
Ultimately, it makes sense for Canada and Europe to become closer energy partners at a time when global superpowers are looking to use trade as a tool of geopolitical coercion, Hodgson said.
“They’re looking around and saying, how do we create energy security?” he said. “Where can we find a supplier who shares our values? And they look around and they don’t see a lot of choices.”
