German utility to buy one million tonnes of LNG per year from Ksi Lisims project

A German utility has signed a long-term agreement to buy one million tonnes of liquefied natural gas per year from the yet-to-be-built Ksi Lisims project in northern British Columbia as European countries look to lock down reliable fuel supplies in a turbulent geopolitical landscape.

Deliveries to German government-owned company Securing Energy for Europe, or SEFE, are to begin in the early 2030s and cover a period of up to 20 years, Natural Resources Minister Tim Hodgson told a news conference in Vancouver on Wednesday.

“In a moment that feels uncertain and volatile, the world trusts Canada,” Hodgson said.

Houston-based Western LNG is the lead developer and future operator of Ksi Lisims alongside Rockies LNG, a consortium of Canadian natural gas producers, and the Nisga’a Nation, on whose lands the project would be located. The floating plant would export up to 12 million tonnes of LNG per year from the site on Pearse Island, by the Alaska border.

The $10-billion project has regulatory approval but the partners have yet to make a final investment decision.

“Our agreement with SEFE reflects growing confidence in Ksi Lisims LNG, our commercial and engineering approach, and brings our project a significant step closer to starting construction,” said David Thames, head of Western LNG.

LNG is natural gas that has been chilled into a liquid state, enabling it to be shipped by sea on specialized tankers. The federal and B.C. governments are supportive of its development, touting it as a cleaner alternative to coal for power generation and a bridge in the gradual transition away from fossil fuels. It is also seen as a way to bolster the energy security of Canada’s allies amid a global supply crunch.

“This is a significant project that will contribute now and in the future to regional, provincial and national prosperity,” said Adrian Dix, B.C.’s minister of energy and climate solutions.

“It’s a substantial project. It’s a real project.”

Federal Conservative Opposition Leader Pierre Poilievre downplayed the gravity of Wednesday’s announcement.

“You actually don’t need to sign new agreements because the rest of the world is already begging for our energy,” he told reporters in Ottawa.

“It doesn’t take a master negotiator to convince a man in the desert to take a glass of water, right? It takes the ability to deliver the glass of the water.”

Ksi Lisims and other B.C. LNG projects were developed with exports to Asia in mind, given the short shipping distance across the Pacific.

Germany would not seem to be a logical buyer for western Canadian gas based solely on geography, but Hodgson said other considerations were at play for SEFE.

“We are a reliable partner in a world where reliable partners are increasingly hard to find,” he said.

European countries have looked to source gas from places other than Russia, which had been their dominant supplier, since that country’s invasion of Ukraine in 2022.

The next region they looked to was the Middle East. But the U.S.-Israel war with Iran has choked off LNG shipments from that region since late February.

Cargoes from Ksi Lisims could travel to Germany via the Panama Canal, provided vessels are small enough, or take the long way around South America or Africa, Hodgson said. But more likely are swap deals, where SEFE could essentially trade cargoes with another company with a ship headed in the right direction.

The Ksi Lisims project, and a natural gas pipeline that would connect to it, have been facing stiff opposition from environmental advocates and legal challenges from some First Nations.

“First Nations are already experiencing the devastating impacts of climate change first-hand, and we cannot continue gambling future generations’ prosperity, health, and well-being on an industry that places increasing pressure on our lands, waters, salmon, and ecosystems,” said Grand Chief Stewart Phillip, with the Union of British Columbia Indian Chiefs.

Jesse Stoeppler, co-executive director of the Skeena Watershed Conservation Coalition, said Canadians deserve “honest conversations” about the risks the project entails.

“A government announcement does not create Indigenous consent, resolve active litigation or guarantee economic viability.”

Eva Clayton, president of the Nisga’a Lisims Government, told the news conference that there were “a whole mixture of thoughts” when her nation consulted with other Indigenous communities during the project’s early days.

“But more and more of our Indigenous people are beginning to recognize the very trying times that the world is facing,” she said.

“And so they’re looking at ways to bring prosperity to their people, because when you think about it … we’re managing poverty. We now want to manage prosperity.”

The LNG Canada facility further south along the coast in Kitimat, B.C. and owned by Shell and four Asian firms, was the first project of its kind to start up in this country almost a year ago.

Ksi Lisims and an expansion to LNG Canada have been referred to the major projects office, which aims to speed along approvals for infrastructure deemed in Canada’s national interest.

The Cedar LNG project in Kitimat and Woodfibre LNG project near Squamish, B.C., are under construction.

Environmental groups have disputed politicians’ and industry players’ casting of LNG as a green transition fuel. They point to emissions of methane — a more potent greenhouse gas than carbon dioxide and the main component of natural gas — all the way from the well head to its end use.

“Ksi Lisims LNG will lock in decades of planet-heating pollution while doubling down on an economic model held hostage to the whims of the world’s volatile powers,” said David Quigg, organizer with Sierra Club B.C.

Hodgson was asked at the news conference about whether LNG would displace more polluting fuels or simply feed the gargantuan power needs of artificial intelligence data centres.

“We need to engage in the world as it is, not as we wish it to be,” the minister replied.

“The AI revolution is a real revolution. It is a new revolution. It is dramatically increasing the demand for power, on top of already a need to electrify our economies to reduce carbon footprints.

“So the reality is, every country is looking at significantly increased demand for electricity.'”

This report by The Canadian Press was first published May 27, 2026.

— With files from Chuck Chiang in Vancouver and Sarah Ritchie in Ottawa

Lauren Krugel, The Canadian Press