Canada, Germany Sign Long-Term LNG Supply Deal Amid Global Energy Shift
Canada has signed a major energy agreement with Germany that will pave the way for long-term exports of liquefied natural gas (LNG) to Europe beginning in the early 2030s.
The announcement was made on Wednesday in Vancouver by Canada’s Energy Minister Tim Hodgson, who described the development as a significant breakthrough for both countries.
Under the agreement, Germany’s state-backed energy company, Securing Energy for Europe (SEFE), will import one million tonnes of LNG annually from the proposed Ksi Lisims LNG project located on the coast of British Columbia.
The supply arrangement is expected to last for up to 20 years once exports begin.
The deal comes as European countries continue searching for stable energy alternatives following disruptions caused by Russia’s invasion of Ukraine and ongoing geopolitical tensions affecting global energy markets.
For Canada, the agreement also marks a major step toward reducing dependence on the United States as its primary energy export destination.
Official data from Canada’s energy regulator showed that nearly all Canadian LNG exports in 2024 were shipped to the US market.
Hodgson said Canada is positioning itself as a dependable energy supplier due to its political stability and vast natural resources.
He added that the agreement could help accelerate financing for the Ksi Lisims project, which is still awaiting a final investment decision.
According to him, construction could commence within months once funding arrangements are completed.
Canadian Prime Minister Mark Carney has reportedly identified the Ksi Lisims LNG project as one of national importance, making it eligible for an accelerated review process.
The energy minister disclosed that discussions leading to the agreement began during a trade mission to Berlin led by Carney and senior government officials last year.
Despite government optimism, the project continues to face resistance from environmental organisations and some Indigenous groups.
Several advocacy groups have argued that the LNG project poses environmental risks and may face legal obstacles.
Environmental Defence spokesperson Alex Walker criticised the development, describing it as a legally disputed fossil fuel project that has struggled for years to attract investors.
Some First Nations communities have also initiated legal action against the project, although others, including the Nisga’a Nation, support the development because the facility would be located within their traditional territory.
The agreement has also intensified debates within Canada’s ruling Liberal Party over climate and environmental policies.
Fourteen Liberal lawmakers recently expressed concerns about what they described as weakening environmental commitments by the government.
Former Environment Minister Steven Guilbeault also announced plans to step down from caucus later this year, signaling growing divisions over energy expansion policies.
Meanwhile, Prime Minister Carney separately announced that Canada would purchase early-warning aircraft technology from Sweden rather than American manufacturers, continuing efforts to reduce dependence on US suppliers.
