European energy buyers want Canadian liquefied natural gas. They are willing to ship it from British Columbia through the Panama Canal to get it. According to a recent report from Energy Now, companies like Germany’s Uniper are in commercial talks with Ksi Lisims LNG. This proposed export terminal sits on Canada’s Pacific coast.

The Saint John Connection

You know Saint John plays a major role in the energy sector. Our city hosts the Repsol LNG terminal. However, Canada’s east coast lacks the infrastructure to export large amounts of LNG to Europe. All of Canada’s emerging export capacity is on the west coast. This leaves Saint John as the only major facility on this side of the country.

The West Coast Solution

Because the east coast cannot meet the demand, European buyers are looking west. Shipping from the Pacific coast through the Panama Canal increases costs and transit times. Buyers accept these hurdles to secure energy from a stable democracy like Canada. The Ksi Lisims project involves Houston based Western LNG, a consortium called Rockies LNG, and the Nisga’a First Nation. Shell and TotalEnergies already signed 20 year purchase agreements with the project.

Global Pressures Drive Demand

The ongoing conflict in Iran and the closure of the Strait of Hormuz force European countries to diversify their energy sources. Last year, the United States supplied 96 percent of Germany’s LNG imports. Buyers want to spread that risk. Jamie Heard, vice president of capital markets for Tourmaline Oil, notes the strong business case.

“The economic rationale is there, these projects can pay themselves off quite quickly with spreads at that level,” Heard said.

Frequently Asked Questions

Why are European buyers looking at Canadian LNG?

Global conflicts disrupt traditional energy supplies. Buyers want stable energy sources from democratic countries like Canada.

Why ship from the west coast instead of the east coast?

Canada’s east coast lacks the necessary export infrastructure beyond the Repsol terminal in Saint John. The west coast has emerging export facilities.

Will the Ksi Lisims LNG project solve Europe’s energy needs immediately?

No. The project requires several years of construction before it can export natural gas.