Germany, Canada in talks over LNG terminal for export to Europe

May 29, 2023

[1/2] German Chancellor Olaf Scholz and Canadian Prime Minister Justin Trudeau address the media during their bilateral meeting at the G7 summit at Elmau Castle, Germany, June 27, 2022. Kerstin Joensson/Pool via REUTERS

BERLIN/LONDON, June 28 (Reuters) - Germany is in talks with Canada over options to export liquefied natural gas (LNG) to Europe via a terminal on Canada's east coast, a German government official told Reuters on Tuesday.

German Chancellor Olaf Scholz discussed the issue with Canadian Prime Minister Justin Trudeau on the sidelines of the summit held by The Group of Seven economic powers (G7) leaders this week, two other sources told Reuters.

Berlin has been rushing to phase out Russian energy imports after Moscow's invasion of Ukraine and is looking for alternative supply routes and sources of energy.

It has backed the construction of two LNG terminals and has rented four floating storage and regasification units (FSRUs) as a stop-gap measure. read more

In May, Canadian Natural Resources Minister Jonathan Wilkinson said the Canadian government was in discussions with the companies behind two proposed east coast LNG export facilities to see how it could speed up the projects and help boost supply to Europe. read more

Canada, the world's sixth-largest natural gas producer, does not have any east coast LNG facilities and only one under construction on its west coast.

"In terms of CO2 footprint and proximity to European markets Canadian east coast projects are very well placed," one of the sources said.

The second source said that Canadians were eager to develop new fields given high shale gas prices and recognised Germany's reputation as being environmentally friendly.

Germany consumes around 100 billion cubic meters (bcm) of natural gas annually with around 55% of that coming from Russia and smaller volumes piped from Netherlands and Norway.

Spanish oil major Repsol's (REP.MC) regasification plant on Canada's east coast, through which it imports into the United States, could potentially have a liquefaction capacity installed to export directly into Northwest Europe, an industry source said.

The office of Canadian Prime Minister Justin Trudeau was not immediately available for comment.

Repsol told Reuters it is continuously exploring options to maximize the value of the terminal, with a particular focus on new lower-carbon opportunities to help meet market demand.

"The company will look at any/all business that enhances or creates value at Saint John LNG, including the potential to add liquefaction capabilities to the existing facility," it added.

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Riham Alkousaa is the energy and climate change correspondent for Reuters in Germany, covering Europe's biggest economy's green transition and Europe's energy crisis. Alkousaa is a Columbia University Journalism School graduate and has 10 years of experience as a journalist covering Europe's refugee crisis and the Syrian civil war for publications such Der Spiegel Magazine, USA Today and the Washington Times. Alkousaa was on two teams that won Reuters Journalist of the year awards in 2022 for her coverage of Europe's energy crisis and the Ukraine war. She has also won the Foreign Press Association Award in 2017 in New York and the White House Correspondent Association Scholarship that year.