TORONTO — Canada has reached a deal to export liquefied natural gas to Germany from a planned Pacific Coast terminal, marking a step in Prime Minister Mark Carney’s push to diversify trade away from the United States.
An official familiar with the matter confirmed Tuesday that Canada will sign the agreement with Germany’s SEFE group, which stands for Securing Energy for Europe. The deal involves shipments from the proposed KSI Lisims export facility on the coast of British Columbia, with up to 1 million metric tons of liquefied natural gas per year to be exported. The official spoke on condition of anonymity ahead of Wednesday’s planned announcement.
Prime Minister Mark Carney has set a goal to double non-U.S. trade within a decade. Currently, oil and gas-rich Canada sends almost all of its energy exports to the United States. The new arrangement with Germany represents an effort to broaden those markets.
British Columbia Premier David Eby said earlier Tuesday that a supply deal with Germany would be a key step for the partners behind the Ksi Lisims project to decide whether to proceed with their $10-billion Canadian plant and export terminal. The facility, located on Pearse Island near the border with Alaska, already holds the necessary permits, though the consortium has not yet made a final investment decision that would allow construction to begin.
“Sealing up offtake agreements with buyers is a key step before Ksi Lisims can reach that milestone,” Eby said. The partnership has already signed supply agreements with a unit of London-based Shell and France-based TotalEnergies.
SEFE is a leading German energy utility and the former German subsidiary of Gazprom, which Germany nationalized in 2022 amid Europe’s energy crisis linked to the war in Ukraine and developments in the Middle East. As European countries backed Ukraine, Russia reduced supplies of natural gas used for heating homes, generating electricity, and powering industry. The resulting energy crisis has contributed to inflation and forced some factories to close as prices rose sharply.
Germany was once a major importer of Russian gas before the conflict began. The new Canadian supply route offers an alternative source for the German utility as it seeks stable imports from outside traditional suppliers.
The Ksi Lisims project has drawn attention for its potential to open new export channels on Canada’s Pacific coast. Officials have noted that securing long-term buyers remains essential before the $10-billion investment moves forward.
According to the official, the agreement with SEFE will be formally announced on Wednesday. Details on pricing and exact delivery timelines were not immediately released.
Industry observers have pointed out that Canada’s energy sector has long relied heavily on U.S. buyers, making diversification efforts like this one significant for future planning. The deal aligns with Carney’s broader trade objectives announced earlier this year.
SEFE’s role as a nationalized entity adds another layer to the transaction, reflecting Germany’s efforts to secure energy independence following the 2022 nationalization. The utility continues to seek reliable overseas partners to replace previous volumes from Russia.
Construction on the Ksi Lisims terminal cannot start until the consortium reaches its final investment decision. Eby emphasized that additional offtake agreements would help clear that hurdle.
The project’s location on Pearse Island positions it to serve Asian and European markets more directly than some existing Canadian export points. Supporters say it could create jobs in northern British Columbia while expanding Canada’s global energy footprint.
Further announcements are expected Wednesday, when the agreement between Canada and SEFE is scheduled to be made public. Both governments have described the arrangement as an important development in bilateral energy cooperation.