Germany's Big LNG Deal With Canada May Never Deliver a Single Cargo
Hormuz Shutdown Forces Malaysia to Overhaul Crude Supply Chain With over two decades of journalistic experience working in newspapers, trade publications and as a mining reporter, Andrew Topf is a seasoned writer specializing in… The Iran war has made supplies of liquefied natural gas, or LNG, the most strategic since Russia’s invasion of Ukraine in 2022.
Suddenly, countries are scrambling to get their hands on molecules that provide reliable baseload power to industries and homes.
That explains why Germany is buying LNG from Canada.
It’s to ensure long-term energy security, reduce reliance on volatile global supplies, and diversify away from Middle Eastern and Russian energy markets.
At the end of May, the Canadian governmentbrokered a dealbetween the Ksi Lisims LNG facility planned for north of Prince Rupert, on the British Columbia coast, and German company SEFE, which is agreeing to buy 1 million tonnes of LNG per year for up to 20 years Ksi Lisims LNG is a joint venture owned by the Nisga’a Nation, Texas-based Western LNG, and Rockies LNG, a consortium of Canadian natural gas producers.Related: Kuwait Offers First Crude Cargoes to Asia since Iran War Started The agreement marked the first long-term LNG supply arrangement between a Canadian project and a European buyer.
On June 8, asecond, preliminary deal was announced.
Germany’s Uniper signed a letter of intent with Ksi Lisims LNG for a possible offtake agreement of 2 million tonnes of LNG per year.
Construction of the facility, which has an annual capacity of 12 million tonnes, could begin in 2027, although there some significant hurdles to overcome.
First and foremost is a Final Investment Decision.
To get an FID across the line, Ksi Lisims must show there is enough demand to start construction.
The JV already has binding offtake agreements with Shell (NYSE:SHEL) and TotalEnergies.
With SEFE and Uniper, up to 7 million tonnes have been annually committed.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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