Canada and Germany’s state-owned energy firm SEFE said on Wednesday they had reached what Canada described as its first LNG supply deal with a European buyer, underscoring efforts on both sides to diversify energy trade amid global market uncertainty. Earlier, sources familiar with the matter said Canada will sign the agreement with Germany’s SEFE group — Securing Energy for Europe — for supplies from the proposed Ksi Lisims export facility on the coast of British Columbia, the AP reported. The sources spoke on condition of anonymity because they were not authorized to speak ahead of Wednesday’s announcement. Up to 1 million metric tons of liquefied natural gas per year will be exported under the agreement. The agreement comes as Canadian Prime Minister Mark Carney has set a target of doubling non-US trade within a decade. Energy-rich Canada currently exports almost all of its oil and gas to the United States. British Columbia Premier David Eby said earlier on Tuesday that a deal to supply Canadian LNG to Germany would mark a key step towards the partners behind the Ksi Lisims project taking a final investment decision on the CA$10 billion ($7.2 billion) plant and export terminal. Ksi Lisims, located on Pearse Island near the border with Alaska, has secured the permits it requires, but the consortium has yet to make a final investment decision that would allow construction to begin. Eby said securing long-term offtake agreements with buyers is a crucial step before the project can move forward. The partnership has already signed supply agreements with a subsidiary of Shell and France’s TotalEnergies. SEFE is a major German energy company. It was previously the German subsidiary of Gazprom before Berlin nationalized it in 2022 as Europe struggled with an energy crisis tied to the war in Ukraine. After European countries backed Ukraine, Russia sharply reduced natural gas supplies, triggering an energy crisis that fueled inflation and forced some factories to scale back or shut down because of soaring energy prices. Before the war, Germany was one of the largest importers of Russian gas in Europe. Germany continues to rely on LNG imports as part of its efforts to replace Russian pipeline gas supplies.
