German energy player Uniper has signed off on a two-decade-long liquefied natural gas (LNG) deal with a multibillion-dollar LNG project being developed on Canada’s northwest coast to export lower-carbon LNG to energy markets.
Uniper and Ksi Lisims LNG have signed a long-term LNG sale and purchase agreement (SPA) for the delivery of 2 million tonnes per annum (mtpa) of LNG, approximately 30 terawatt hours, on a free-on-board (FOB) basis to the German firm for up to 20 years, in the presence of Katherina Reiche, Germany’s Federal Minister for Economic Affairs and Energy, and Vera Alexander, Canadian Ambassador to the Federal Republic of Germany.
Michael Lewis, CEO of Uniper, commented: “This agreement is about far more than LNG. By signing this long-term off-take agreement, we are strengthening Uniper’s portfolio with a reliable source of LNG from Canada. As a trusted partner, Canada helps to broaden Europe’s energy supply and strengthens resilience against future disruptions.
“In an increasingly uncertain world, diversification is a strategic necessity. The project combines security of supply, low-carbon hydropower infrastructure and a strong partnership – exactly the kind of long-term energy partnership we seek to build.”
With first deliveries expected from 2032, the European company claims that this deal marks the first major long-term LNG supply arrangement between Canada and Germany and represents a significant step in strengthening the strategic energy partnership between the two countries.
Davis Thames, President, Founder and CEO of Western LNG, emphasized: “The LNG sales agreement that we have entered into today with Uniper is our first with a European utility, and the beginning of an important long-term relationship between our companies. Canada is naturally endowed with a world-class natural gas resource, which, through responsible development, is one of the lowest emissions production complexes in the world.
“Paired with an abundant hydro resource, Ksi Lisims LNG will be one of the lowest emissions sources of LNG in the world. We look forward to commercializing the rest of the project so that we can move into construction shortly.”
This SPA comes more than two months after the Ksi Lisims LNG project, which was proposed by the Nisga’a Nation, Rockies LNG, and Western LNG, obtained a heads of agreement (HOA) with Germany’s Securing Energy for Europe (SEFE) for the sale and purchase of 1 million tonnes per annum of LNG.
The agreement marks an important milestone for Uniper as the company continues to build a resilient and diversified long-term LNG portfolio. The fully destination-flexible volumes provide additional flexibility to support security of supply in Europe when needed.
Eva Clayton, President of Nisga’a Lisims Government, highlighted: “Since time immemorial, the Nisga’a people have adhered to the concept of a Common Bowl. This foundational idea teaches that we are all interdependent and directs us to share our abundance with others.
“Today, that same spirit of sharing has led us to pursue LNG exports on the global stage. We are proud that this agreement with Uniper reflects the Common Bowl philosophy, and we are grateful to see governments on both sides working together to make it possible.”
According to Uniper, a distinctive feature of the Ksi Lisims LNG project is its planned use of hydroelectricity to power the liquefaction process. By combining access to Canadian natural gas resources with renewable electricity from British Columbia’s hydroelectric system, the project is expected to produce LNG with a 90% lower carbon intensity than conventional LNG facilities.
Reiche underlined: “This agreement sends a strong signal for greater security of supply and strategic independence: Uniper is securing around two million tonnes of Canadian LNG per year over the long term, equivalent to approximately 30 terawatt-hours.
“This is how we strengthen our resilience: through new sources of supply, long-term partnerships and greater diversification. Canada is a strategic partner for us – reliable, rich in natural resources and closely connected to Germany through strong economic ties.”
Ksi Lisims LNG, which means “from the Nass River” in the Nisga’a language, is a proposed net-zero liquefied natural gas project in British Columbia, located on Nisga’a Nation-owned land on the northern tip of Pearse Island.
Powered by renewable hydroelectricity, the LNG project is designed to be one of the lowest-emission-intensity LNG facilities in the world with a pathway to net-zero. The facility will produce 12 million tonnes per annum of LNG from two floating LNG (FLNG) production and storage facilities.
The 12-mtpa natural gas liquefaction and marine terminal project is envisioned to receive 1.7–2 billion cubic feet of natural gas per day and export it overseas once commercial operations start in late 2028 or 2029. The project obtained a 40-year export license from the Canada Energy Regulator (CER) two years before the first LNG offtake agreement was inked with Shell.
Tim Hodgson, Minister of Energy and Natural Resources of Canada, noted: “This agreement between Ksi Lisims LNG and Uniper represents more than an energy partnership. It is a powerful example of how, by working with allies like Germany, Canada can strengthen its economy and sovereignty, and support global energy security.
“Amidst energy market disruptions, international demand for reliable energy only continues to grow, and projects like this – developed in partnership with Indigenous Peoples and providing best-in-class low-carbon energy – demonstrate how Canada is not only a competitive, but a leading, energy superpower.”
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