Canada, Germany poised to announce landmark LNG export deal from B.C.

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The proponents behind Ksi Lisims LNG have not fully committed to actually building this project, which will involve pumping gas from reserves in northeastern B.C. Across the province to a liquefaction terminal on Nisga'a territory along the north coast.

While both the provincial and federal governments have endorsed the project — it was referred to Ottawa's Major Projects Office last year for fast-tracked approval — the consortium behind it hasn't made what's called in the industry a final investment decision, or FID, on what will be a multi-billion dollar project.

But a source familiar with today's deal tells me the German firm SEFE will buy one million metric tonnes of LNG annually — a sizable chunk of the 12 million tonnes the facility will produce every year. This gives the partly Indigenous-owned project even more momentum.

While the Nisga'a Nation and its partner, Western LNG, are not expected to announce a FID today, a source tells me this German agreement has all parties "bullish," and the announcement is "a big milestone" that makes the project that much more economically viable. 

Canadian LNG set to displace Russian gas in international market, Carney says

Prime Minister Mark Carney, speaking Wednesday ahead of an energy announcement in B.C., said 'Canada is one of the solutions' for energy security for Europe and Asia. The prime minister highlighted B.C.'s Ksi Lisims LNG project, which is reportedly part of a deal that would sell one million metric tonnes of liquified natural gas from Canada to German buyers.

Prime Minister Mark Carney spoke this morning about the pending Ksi Lisims LNG agreement on the sidelines of the CANSEC military and defence conference here in Ottawa.

Carney said Canada is "one of the solutions" to what he described as a global energy crisis, given that so much Qatari gas is offline for the foreseeable future because of the Iran conflict. 

Carney also said this purchase agreement is about displacing Russian gas, which was Germany's primary fuel provider until Russia's invasion of Ukraine.

The government is quite pleased with this announcement, framing it as a victory for Carney's push to diversify trade away from the U.S. And draw closer to Europe in particular.

A source familiar with the deal tells me Carney connected Ksi Lisims with the German company that will buy this gas, SEFE, during a trade mission to Berlin last summer.

While former prime minister Justin Trudeau said there was "no business case" for selling Canadian LNG to Europe, Carney said today that "there's a lot more we can do in partnership with our European partners."

Mindful of the environmental criticism a project like this will inevitably face, Carney also pitched Ksi Lisims as "the lowest-carbon LNG in the world" and one that's in the top 10 per cent "in terms of emissions" for such a project.

SEFE, or Securing Energy for Europe, is an international energy company wholly owned by the German government.

The company was originally a subsidiary of the massive Russian state-owned enterprise Gazprom. It was nationalized by the German government in 2022 following Russia's invasion of Ukraine.

Germany said the move was necessary to ensure energy supply as the company faced insolvency.

The company says it supplies more than 200 terawatt hours of power annually to 50,000 clients in Germany, the U.K. And seven other markets, and that it operates about a quarter of Germany's gas storage capacity.

The German government has committed to privatizing the company by 2028.

The Ksi Lisims project has faced pushback from both environmental groups and some First Nations.

Groups including Ecojustice and the Wilderness Committee argue the project's assessment failed to adequately consider its climate impacts and the effects of powering the project with electricity.

They say B.C. Is already failing to meet its climate goals, and that the project will export the equivalent of 33 million tonnes of greenhouse gas emissions per year.

And while the Nisga'a Nation is a partner in the project, four of six other First Nations who were asked declined to provide consent for the work.

Both the Lax Kw'alaams Band and the Metlakatla First Nation have filed legal challenges to the terminal, citing outstanding Aboriginal title claims and alleging B.C. Ignored their concerns about negative impacts.

Gitanyow hereditary chiefs have also raised environmental concerns, including a risk to important salmon habitat.

Opposition also centres on the 900-kilometre Prince Rupert Gas Transmission pipeline which, when completed, would cross more than 1,300 waterways to supply the project.

A hereditary chief with the Gitxsan Nation is currently challenging that project's route in B.C. Supreme Court, arguing it will go through "one of the last remaining untouched areas" of their territory without proper consultation.

Exploring Canada's LNG potential as first-ever exports begin

LNG Canada is now operational and a handful of other LNG projects are either under construction or in development.

Sources say the deal is between the proposed Ksi Lisims LNG project in B.C. And German company SEFE, with an agreement to supply one million metric tonnes of LNG annually. 

Federal Energy Minister Tim Hodgson is expected to make an announcement Wednesday in 

Vancouver regarding "international energy exports."

The proposed Ksi Lisims LNG project, located about 80 kilometres north of Prince Rupert in Nisga'a Nation territory, has been identified as a priority project by both the B.C. Government and the federal government.

Speaking Tuesday, B.C. Energy Minister Adrian Dix declined to confirm details of the agreement but hinted at an international market expansion.

"Ksi Lisims has been obviously working to build markets around the world so this is their announcement," Dix told reporters. "I'm not going to steal their thunder but obviously a diversity of markets, when you’re marketing your product around the world, is a good thing."

B.C. Premier David Eby said the agreement could help the project secure the long-term purchase commitments needed to proceed.

"Part of the work to get to a final investment decision is securing offtake agreements — that's commitments to buy the LNG from the facility," Eby said. "So a major announcement with a European partner of purchasing LNG gets us that much closer."

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