TORONTO – A major milestone in transatlantic energy cooperation has emerged this week, as an anonymous official confirmed Tuesday that Canada has locked in a long-term liquefied natural gas (LNG) export agreement with Germany’s state-backed energy utility SEFE, short for Securing Energy for Europe. The deal will cover supplies from the proposed Ksi Lisims LNG terminal, a $10 billion Canadian (US$7.2 billion) project planned for British Columbia’s Pacific Coast on Pearse Island, near the Alaskan border. The official spoke on condition of anonymity ahead of a formal public announcement scheduled for Wednesday, and revealed that the agreement will see up to 1 million metric tons of LNG shipped from the terminal to Germany each year.
This deal marks a critical step forward for the Ksi Lisims project, which has already secured all necessary construction permits but has not yet received a final investment decision from its developing consortium. British Columbia Premier David Eby had signaled earlier Tuesday that a binding offtake agreement with a major European buyer like SEFE would be a deciding factor pushing the consortium to greenlight construction, noting that finalized sales contracts are a required precursor to any final investment decision for large-scale energy infrastructure projects. The Ksi Lisims consortium has already secured similar offtake agreements with subsidiaries of two global energy giants: London-based Shell and France’s TotalEnergies.
For Canada, the agreement aligns with a key trade priority set by newly elected Prime Minister Mark Carney, who has pledged to double Canada’s non-U.S. trade volume over the next 10 years. Currently, the country’s vast oil and gas sector ships nearly all of its energy exports to its southern neighbor, making diversification into European and other global markets a core economic and strategic goal.
For Germany, the deal addresses ongoing energy security concerns that first emerged in 2022, when the Russian invasion of Ukraine prompted Moscow to cut most of its natural gas supplies to Europe. Prior to the war, Germany relied heavily on Russian piped gas to power its industry, heat residential homes, and generate electricity. The sudden supply cut sparked a continent-wide energy crisis that drove up inflation across the EU, pushed energy prices to record highs, and forced multiple industrial facilities to temporarily suspend operations. SEFE, originally the German subsidiary of Russian energy giant Gazprom, was nationalized by the German government in 2022 to stabilize the country’s energy market amid the crisis, and has since been working to lock in reliable alternative LNG supplies from non-Russian producers around the world.