Germany is moving to secure liquefied natural gas (LNG) from Canada. As the European Union works to reduce its reliance on Russian gas, Germany is also seen accelerating efforts to diversify supply chains and strengthen energy security.
Bloomberg reported on the 27th, citing multiple sources, that Germany's state-owned energy company SEFE is set to sign a contract to receive natural gas through the "Ksi Lisims LNG" project under way on the west coast of British Columbia, Canada.
SEFE was originally the German subsidiary of Russian state gas company Gazprom, but the German government nationalized it after the war in Ukraine.
According to Bloomberg, the specific details of the deal are expected to be officially announced on the 28th by Canada Energy and Natural Resources Minister Tim Hodgson.
The Ksi Lisims LNG project is a C$10 billion (10.8579 trillion won) floating LNG export facility. It has already received regulatory approval, and Western LNG backed by U.S. private equity firm Blackstone, Rockies LNG Partners, and the Nisga'a Nation, a Canadian Indigenous community, are participating in the project. The Nisga'a Nation holds ownership of the development site.
Currently, the Ksi Lisims LNG developers are pursuing construction of facilities to produce 12 million tons of LNG annually. That is a similar level to phase one of "LNG Canada," led by Shell, which began operations last year. However, a final investment decision (FID) has not yet been made, and the German and Canadian governments and project stakeholders have not issued official comments on the deal.
Minister Hodgson recently told Bloomberg that European countries are actively seeking stable alternative gas suppliers after supply disruptions from Russia and the Middle East.
He also said Europe is wary of becoming overly dependent on U.S. LNG. The view is that Europe will diversify supplies to secure energy security, taking into account potential frictions with the Trump administration.
Minister Hodgson emphasized, "Canada can be a reliable supplier that does not use energy as a tool of political pressure," adding, "It can serve as an alternative source of supply for Europe."
He added that in the long term, exports via Canada's east coast or the northern Hudson Bay could be possible, but for now, expanding LNG supply from the west coast is the most realistic option from Europe's perspective.
As for shipping to Europe, various options are reportedly under review, including using the Panama Canal, a South America detour route, and LNG volume exchange (swap).
Minister Hodgson said, "As global powers use trade as a tool of geopolitical pressure, it is a natural progression for Canada and Europe to build a closer energy partnership," adding, "Europe wants a stable supplier that shares its values, but the options are limited."