By Paul Vieira
OTTAWA--Canada unveiled a deal to sell liquefied natural gas to Germany, marking a significant step in Prime Minister Mark Carney's effort to capitalize on its oil-and-gas reserves and position the country as an energy superpower.
Canadian Energy Minister Tim Hodgson said Wednesday that Germany's state-owned utility, SEFE, has agreed to purchase one million metric tons a year of LNG for up to 20 years, with shipments starting early in the 2030s. SEFE said the agreement, once concluded, would mark Germany's first partnership with a Canadian LNG supplier.
The deal is the result of geopolitical developments this decade -- Germany attempting to reduce its reliance on Russian gas, and Canada trying to increase exports of its energy products to non-U.S. markets amid heightened trade tensions between Ottawa and Washington.
The Germany-bound shipments would originate from a proposed floating LNG export terminal to be built off British Columbia's north coast. The terminal would be operated by a consortium led by Western LNG, a Blackstone-backed company. The Nisga'a Nation, a local indigenous community, is also a co-owner.
The Canada-Germany deal, Hodgson said, represents "the urgent need for Canada to not just talk about our resource wealth, but use our energy and natural resources to put the proverbial best cards in our hands, and to build Canada strong for all." Carney and Hodgson helped ignite talks between Germany and the LNG terminal owner during a visit to the European country last summer.
SEFE Chief Executive Egbert Laege said the Canada deal follows commitments the utility made to purchase gas from Argentina, the Middle East and the U.S.
"This partnership gives us the flexibility to deliver cargoes to any destination, thus further enhancing the resilience and diversification of our portfolio for the benefit of our global customers," Laege said in a statement.
Neither SEFE nor the Canadian government placed a dollar value on the sales agreement.
Among Carney's top policy priorities is to build and refurbish the country's trade corridors, and champion resource projects, in a bid to diversify exports away from the U.S. and to other markets in Asia and Europe. Given rising energy and electricity demand, Hodgson said allies with an interest in reducing carbon emissions view Canadian LNG as a viable fuel while they work toward other clean-energy options.
"We are going to need more of that transition fuel, and we are going to need it for longer," Hodgson said.
The Germany LNG deal marks a sea change of sorts for Canada. In 2022, former German chancellor Olaf Scholz was interested in securing Canadian LNG to help replace Russian gas imports. During a visit in Canada, Scholz attended a media event with former Canadian Prime Minister Justin Trudeau, who at the time said there was no strong business case to ship LNG from Canada to Europe.
Hodgson said Germany, in the aftermath of Russia-Ukraine war, turned to the Middle East for LNG supply.
"Almost all of the LNG that's produced in the Middle East comes through the Strait of Hormuz," he said. "That's no longer a reliable source."
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
May 27, 2026 13:19 ET (17:19 GMT)
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