Germany has reached a strategic agreement with Canada for the purchase of liquefied natural gas (LNG) from a new plant on the Canadian Pacific coast.
The agreement, which provides for up to one million tons of LNG per year for twenty years starting in the early 2030s, represents an important piece in Berlin’s strategy to reduce dependence on traditional and unstable suppliers.
As reported by Bloomberg and the New York Times, the agreement comes at a time of redefinition of global energy balances, marked by tensions with the United States and the consequences of wars in Ukraine and the Middle East.
Details of the agreement
According to Bloomberg, Germany commits to purchasing up to 1 million metric tons of gas per year from the Ksi Lisims LNG project, located in northwest British Columbia, near the Alaska border.
The agreement has a twenty-year duration and is expected to come into effect in the early 2030s. The German buyer will be SEFE (Securing Energy for Europe), the company previously controlled by Gazprom and nationalized by the German government after the Russian invasion of Ukraine.
As confirmed by Associated Press, the agreement will be signed at the Canadian Embassy in Berlin. According to Euronews, the volumes envisaged correspond to about one eighth of Germany’s LNG imports last year in energy terms.
The New York Times emphasizes that this is a turning point for both countries, which seek to strengthen trade ties outside the U.S. orbit.
The Ksi Lisims LNG project
The gas will come from the Ksi Lisims LNG project, a plant worth about 7.2 billion U.S. dollars, still under development.
The project has already obtained regulatory approvals but still lacks the final investment decision. The consortium is led by Western LNG, a company financed by Blackstone, Rockies LNG Partners, and the Nisga’a indigenous nation, owners of the land.
The Premier of British Columbia, David Eby, emphasized that long-term purchase agreements like the one with Germany are essential to unlock construction.
Once completed, the project will be able to produce up to 12 million tons of LNG per year.
Currently, Canada has only one operational LNG terminal on the west coast: LNG Canada, supported by Shell and launched about a year ago.
Transport routes
The transport of gas from British Columbia to Germany can take place through various routes, including the Panama Canal, or through complex exchange mechanisms with other suppliers.
As sources from the New York Times explain, these exchanges allow cost optimization: Canadian gas could reach Asia, while Norwegian or other origin volumes would reach Europe.
The agreement is part of a broader rapprochement between Canada and Germany on energy, critical minerals, and defense, accelerated by the new international context marked by the Trump administration and trade tensions. Both Carney and Merz see this partnership as a way to strengthen the resilience of two “middle powers” in an increasingly fragmented world.
The agreement, although modest in size compared to German demand, sets an important precedent. It demonstrates that Berlin aims for a broader and more stable supplier basket, while Ottawa accelerates the transformation of its huge gas reserves into a diversified geopolitical and economic resource.
Germany’s energy landscape
Germany, the European industrial locomotive, has experienced a true energy storm in recent years.
After cutting ties with Russian gas following the invasion of Ukraine, Berlin had to accelerate LNG imports, which today represent about 13% of total gas imports.
As Euronews points out, the vast majority of this LNG, about 94%, currently comes from the United States, a dependence that worries German political leaders.
Chancellor Friedrich Merz has repeatedly emphasized the need to diversify supply sources. Recent conflicts in the Middle East, particularly the war with Iran, have also made flows from that region fragile.
Susanne Nies, senior researcher at the Helmholtz-Zentrum Berlin cited by Bloomberg, called the agreement with Canada “a powerful and positive symbol of German diversification both from Russia and potentially from the United States.”
Mark Carney’s objectives
For Canada, the agreement represents a concrete step towards reducing dependence on the United States, which absorbs the vast majority of Canadian energy exports.
Prime Minister Mark Carney has set as a strategic goal the doubling of exports to non-U.S. markets by 2035.
The New York Times highlights how Carney personally pushed for this type of agreements, including during his visit to Berlin last August with a delegation from the energy sector.
Canadian Energy Minister Tim Hodgson told Bloomberg that European countries are seeking reliable suppliers who do not use energy as a tool of geopolitical coercion. “We can be that alternative supplier,” Hodgson said, highlighting how Canada shares common values with European partners.
