Canada has reached its first supply agreement for liquefied natural gas (LNG) with a European buyer, following the signing of a framework agreement between Ksi Lisims LNG and SEFE, the German state-owned energy company.
The deal provides for the purchase of 1 million tonnes of LNG per year for a period of up to 20 years. The agreement, announced on May 27, 2026, is subject to the execution of a definitive sales and purchase agreement.
Deliveries are expected to begin in the early 2030s from the future Ksi Lisims LNG export facility, planned on the Pacific coast of British Columbia, Canada.
SEFE to buy LNG from British Columbia
Ksi Lisims LNG is a project developed by Western LNG, Rockies LNG, and the Nisga’a Nation. The proposed facility will have an export capacity of 12 million tonnes of LNG per year, which would place it among Canada’s largest liquefied natural gas export plants.
According to SEFE, the supply will be contracted on a free on board basis, giving the buyer flexibility to manage the cargo’s destination within the international market.
Canada’s Minister of Energy and Natural Resources, Tim Hodgson, stated that the agreement reflects Canada’s positioning as a reliable energy supplier in a global environment marked by volatility and uncertainty.
Germany seeks to diversify its supply
For Germany, the agreement is part of an energy diversification strategy following the reduction in Russian gas supplies and the geopolitical tensions affecting international energy markets.
SEFE, whose full name is Securing Energy for Europe, already has LNG supply agreements with companies such as Venture Global, Southern Energy, and the Turkish state-owned company BOTAS.
Germany’s Minister for Economic Affairs, Katherina Reiche, noted that cooperation with Canada strengthens a strategic energy partnership and helps make supply chains more resilient to global risks.
Ksi Lisims moves toward a final decision
The agreement with SEFE represents an important step for Ksi Lisims LNG, whose sponsors are working to sign sales and purchase agreements before making a final investment decision.
The project is at a key stage of development and is part of Canada’s efforts to expand its energy exports to markets other than the United States.
Although Asia has historically been considered the natural destination for Canadian LNG due to its proximity from the Pacific coast, European interest has increased amid the need to diversify supply sources.
The project faces regulatory challenges
Canada is seeking to accelerate major energy projects through mechanisms designed to streamline regulatory approvals. However, Ksi Lisims LNG still faces technical, environmental, and social challenges.
Several Indigenous groups have questioned the pipeline infrastructure needed to supply the plant, while environmental organizations have criticized the government’s push for new fossil fuel developments.
Even so, the agreement marks a milestone for Canadian energy policy and for Germany’s supply security strategy.
If it moves forward toward a definitive contract and a final investment decision, Ksi Lisims LNG could become a significant component of energy trade between Canada and Europe over the coming decades.
Source: https://www.reuters.com/
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