Nisga'a Nation President Eva Clayton at a September announcement about the Ksi Lisims LNG project. The Nisga’a Nation, Western LNG and a group of Western Canadian natural gas producers called Rockies LNG are partners in the northwest B.C. project.ETHAN CAIRNS/The Canadian Press
Canada has brokered a deal between a German state-owned utility and a yet-to-be-built liquefied natural gas terminal in British Columbia, two sources say, as the federal government continues its hunt for opportunities to diversify the country’s exports away from the United States.
The arrangement between the Ksi Lisims LNG project and Berlin-based SEFE, short for Securing Energy for Europe, would allow the latter to buy one million tonnes of LNG annually and schedule shipments of that fuel globally beginning in the early 2030s, the sources said.
They added that SEFE intends to export the fuel to Asia, rather than directly to Germany via the Panama Canal. Doing so would indirectly help Europe by freeing up supplies elsewhere in the world, allowing them to be redirected to European markets.
The deal would strengthen the business case for a project whose final outcome is not yet certain. Ksi Lisims has signed similar deals, known as offtake agreements, with other prospective buyers, but its owners have not yet made a final investment decision on whether to build the terminal, which would also require the construction of a politically contentious pipeline to the B.C. coast.
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Energy and Natural Resources Minister Tim Hodgson is slated to make the announcement on Wednesday in Vancouver with Eva Clayton, elected president of the Nisga’a Lisims government, which is part-owner of Ksi Lisims.
The Globe and Mail is not identifying the sources because they were not authorized to speak publicly on the matter.
The project’s other owners are Houston-based Western LNG and a group of Western Canadian natural gas producers called Rockies LNG. The terminal is being developed at Pearse Island, located in northwestern B.C.
The ownership group is expected to make a final investment decision later this year.
Prime Minister Mark Carney has been seeking to make Canada an energy superpower and reduce economic dependence on the United States. Canada is striving to help Europe, which has been experiencing an energy crunch since Russia, formerly a major supplier of fuel to Germany and other countries, invaded Ukraine in 2022.
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Mr. Carney announced last November that Ksi Lisims had made his government’s list of significant projects of national interest to be considered for fast-tracking by the new Major Projects Office.
LNG Canada, this country’s first export terminal for the fuel, began shipping last June from Kitimat, B.C., to Asia. Its Phase 2 expansion plan in Kitimat is also on Ottawa’s fast-tracking list.
Ksi Lisims would receive its natural gas from the proposed Prince Rupert Gas Transmission project, which is co-owned equally by the Nisga’a Nation and Western LNG. The PRGT pipeline would stretch across 750 kilometres from northeastern B.C. to the West Coast.
Two floating production platforms are to be constructed in South Korea for Ksi Lisims, which would build various other LNG infrastructure on Nisga’a lands on Pearse Island.
Ksi Lisims would produce LNG for export to Asia. The expected export capacity would make it the country’s second-largest LNG export terminal, after LNG Canada.
Over the past couple of years, Paris-based TotalEnergies SE and a unit of London-based Shell PLC have each signed agreements to buy two million tonnes a year of LNG from Ksi Lisims, accounting for a combined one-third of the project’s planned capacity of 12 million tonnes a year.
SEFE did not respond to The Globe’s request for comment on Tuesday, while a Ksi Lisims spokesperson and Natural Resources Canada declined comment. Bloomberg News first reported that SEFE had reached the deal.
Two smaller facilities in B.C. that are also planning to deliver to Asia – Woodfibre LNG near Squamish and Haisla Nation-led Cedar LNG in Kitimat – are under construction. Woodfibre expects to finish construction by late 2027 and Cedar by late 2028.
B.C. Premier David Eby in Kananaskis, Alta., on Tuesday, during a closing news conference at the annual western premiers’ meeting.Jeff McIntosh/The Canadian Press
B.C. Premier David Eby welcomed the SEFE-Ksi Lisims ties.
The official announcement on Wednesday will be “about how we can work together to deepen those trading relationships around the world – in this case with Germany,” Mr. Eby said during the concluding news conference on Tuesday at the annual western premiers’ meeting, held this time in Kananaskis, Alta.
Critics say climate and health effects are being ignored, and they are urging governments to suspend LNG development on the West Coast and fracking for natural gas in northeastern B.C. in order to focus on renewable energy.
“We should be announcing German investments in future-proof renewables, not doubling down on the dirty gas exports of the past,” Richard Brooks, climate finance director at Stand.earth, said in a statement.
PRGT faces legal hurdles. A ruling by the B.C. Environmental Assessment Office to support the pipeline plan is unreasonable, according to community leaders who took their concerns to the B.C. Supreme Court.
Activists challenge B.C.’s backing of plans for natural gas pipeline
Lawyers for environmental law charity Ecojustice claim that the B.C. government gave the pipeline the go-ahead unfairly and before enough initial work was done. Lawyers for Ecojustice are representing the local petitioners: Skeena Watershed Conservation Coalition, Kispiox Valley Community Centre Association and resident Kathleen Larson.
The respondents counter that the initial construction was sufficient to garner the regulator’s support. The respondents are PRGT, the Nisga’a Nation and B.C. Environment Minister Tamara Davidson.
After hearings that wrapped up in Vancouver earlier this month, B.C. Supreme Court Justice Alison Latimer reserved her decision.
Gitanyow Nation hereditary chiefs and several Gitxsan Nation leaders have opposed the controversial pipeline route, which would cross their traditional territories.