Canada's Energy Minister Tim Hodgson in the House of Commons in Ottawa last November. Mr. Hodgson confirmed the agreement between Ksi Lisims and SEFE during a press conference on Wednesday.Blair Gable/Reuters
Backers of the Ksi Lisims LNG project say they are moving closer to making a decision to forge ahead with construction in British Columbia after signing a deal with Germany’s state-owned utility SEFE.
The deal will allow Berlin-based SEFE, which is short for Securing Energy for Europe, to have the flexibility to schedule shipments of liquefied natural gas globally.
Houston-based Western LNG, the Nisga’a Nation and a group of natural gas producers named Rockies LNG are collaborative partners in the Ksi Lisims project, which plans to ship 12 million tonnes a year of the fuel from northwest B.C. to Asia.
“Our agreement with SEFE reflects growing confidence in Ksi Lisims LNG, our commercial and engineering approach, and brings our project a significant step closer to starting construction,” Western chief executive officer Davis Thames said in a statement on Wednesday.
Western, which is the equity owner of Ksi Lisims, has investors that include an affiliate of Blackstone Inc., the New York-based investment management company.
Ksi Lisims reaches LNG deal with German utility SEFE
Nisga’a leaders have touted Ksi Lisims and the planned Prince Rupert Gas Transmission pipeline project as prime examples of economic reconciliation.
The 750-kilometre PRGT project, which is co-owned equally by the Nisga’a and Western, would transport natural gas from northeastern B.C. to Nisga’a territory, near Pearse Island in northwest B.C.
During a news conference on Wednesday in Vancouver, federal Energy Minister Tim Hodgson confirmed the agreement between Ksi Lisims and SEFE.
LNG exports from B.C. to Asia would indirectly help Europe because that frees up LNG supplies elsewhere in the world to be rerouted to Europe.
Mr. Hodgson said energy traders would use financial swap contracts to fulfill shipping commitments worldwide, instead of being forced to physically export from B.C. to European markets, via the Panama Canal.
It is important for European countries such as Germany to diversify their energy supplies and strengthen trading relationships with stable democratic partners, he said.
With Germany experiencing an energy crunch after Russia invaded Ukraine in 2022, he expressed optimism that Canada will play an increasingly important role by providing much-needed LNG supply to the global market.
“What we are seeing in British Columbia is also bigger than just one project, or one deal,” Mr. Hodgson said.
Shell PLC-led LNG Canada became the country’s first export terminal for natural gas in liquid form when it started shipments to Asia last June from Kitimat, B.C.
Federal and provincial leaders have announced that Germany’s government-owned utility SEFE has agreed to buy one million tonnes of liquefied natural gas annually from an upcoming LNG project in B.C. The yet-to-be-built Ksi Lisims floating terminal is a partnership involving the Nisga'a Nation, and the deal calls for deliveries to begin in the early 2030s covering up to 20 years.
The Canadian Press
Two projects are under construction in B.C. to produce the fuel, with the goal to export to Asia: Woodfibre LNG near Squamish is slated to finish building by late 2027 and Haisla Nation-led Cedar LNG in Kitimat is set for completion by late 2028.
Also appearing at Wednesday’s news conference were Eva Clayton, elected president of the Nisga’a Lisims government, and Adrian Dix, B.C.’s Minister of Energy and Climate Solutions.
“Today is a very important step forward,” Ms. Clayton said.
Ksi Lisims has plans to initially use temporary barges that would supply electricity generated by natural gas-fired turbines for the liquefaction process and then eventually switch to electric-drive technology, which would be dependent on a proposed new transmission line by BC Hydro.
Prime Minister Mark Carney announced last November that Ksi Lisims made the list of significant ventures of national interest to be considered for fast-tracking by the federal government’s Major Projects Office.
LNG Canada’s Phase 2 expansion plan in Kitimat is also on Ottawa’s fast-tracking list.
SEFE becomes the third purchaser in what is known in the industry as an “offtake” agreement, with its commitment to buy one million tonnes annually for up to 20 years from Ksi Lisims, starting in the early 2030s.
SEFE chief executive officer Egbert Laege welcomed the deal with Ksi Lisims. “This partnership gives us the flexibility to deliver cargoes to any destination,” he said in a news release from Berlin.
Sailing from B.C. to Western Europe could take roughly 30 days, depending on bottlenecks at the often-congested Panama Canal.
By contrast, LNG exported from B.C. to Asia takes eight to 10 days.
Paris-based TotalEnergies SE and a unit of London-based Shell PLC previously signed agreements to each buy two million tonnes a year of LNG from Ksi Lisims.
Critics say climate and health effects are being ignored, and the focus needs to be on renewable energy instead of fossil fuels. They are urging governments to put the brakes on LNG development on the West Coast and fracking for natural gas in northeastern B.C.
“A growing number of Indigenous, legal, economic, environmental and health experts and organizations are vowing to intensify opposition to the proposed Ksi Lisims LNG project,” according to a joint news release issued on Wednesday by a wide range of opponents.
“Organizations also warned that expanding LNG infrastructure risks increasing climate pollution and costs, exposing communities to industrial health impacts.”
Those criticizing the Ksi Lisims-SEFE deal include Skeena Watershed Conservation Coalition, Environmental Defence, Stand.earth, My Sea to Sky, Dogwood, David Suzuki Foundation and Canadian Association of Physicians for the Environment.
“Canadians deserve honest conversations about the legal, financial, climate and public health risks associated with locking the country into another generation of large-scale fossil fuel infrastructure,” Skeena Watershed co-executive director Jesse Stoeppler said in a statement.