Canada Trade Diversification Strategy Paying Off in Energy Sector

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Canadian Prime Minister Mark Carney wants to cut U.S. trade in response to tariff policies from Washington. That's paying off with new deals with European partners.

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Uniper Signs 20-Year Offtake Agreement with Ksi Lisims

Following through on federal efforts to expand trade outside of North America, the developers of the Ksi Lisims liquefied natural gas (LNG) export facility in British Columbia have secured a 20-year offtake agreement with Germany's Uniper.

Canadian Prime Minister Mark Carney in November included Ksi Lisims on a list of major projects meant to support the nation's economy. Industrial Info Resources data show the facility, situated offshore, could be able to churn out as much as 12 million metric tons per annum (MTPA) of gas in the liquid form once operations begin in 2029.

Making good on a preliminary deal from June, Uniper secured 2 MTPA for a 20-year period starting in 2032.

"As a trusted partner, Canada helps diversify Europe's energy supply and strengthens resilience against future disruptions," said Michael Lewis, the chief executive officer of Uniper. "In an increasingly uncertain world, diversification is a strategic necessity."

An offtake agreement for 1 MTPA of LNG brokered in May with German energy company SEFE became the first-ever offtake agreement with a European partner with Canada. Ksi Lisms will be fed by Prince Rupert Gas Transmission (PRGT), which entered the construction phase last year. Led by TC Energy, the 466-mile artery would carry up to 3.6 billion cubic feet per day (Bcf/d) to Ksi Lisims, data from Industrial Info Resources show.

Project developers Western LNG LLC and Rockies LNG Partners signed benefit agreements with three aboriginal groups last month, which in turn withdrew their reviews of the project's environmental certificate.

Canada, meanwhile, is in a technical recession amid broader struggles with U.S. trade policies. Developers expect Ksi Lisims to contribute about US$10.6 billion to Canada's gross domestic product (GDP).

Coastal Complications?

Elsewhere, David Eby, the premier of British Columbia, signed a prosperity agreement with First Nations that ensures coastal protections. Eby's office said the agreement would ensure heavy oil tankers are not present in parts of the province, protecting a marine economy that generates as much as US$2.1 billion annually.

For her part, Marilyn Slett, the chief of the Heiltsuk Nation, said the province has been singled out for nation-building projects that are expected to increase maritime traffic.

"Together, we can build durable economic partnerships, invest in the infrastructure needed to ensure safe and reliable shipping, and protect our environment -- creating lasting benefits for Canadians for generations to come," she said.

That could complicate efforts to deliver more crude oil from British Columbia. The Trans Mountain pipeline, expanded in 2024 to carry 840,000 barrels of oil per day, is the only network in Canada that can send crude outside of North America, but Canadian leaders want more. Alberta and the federal government shook hands over a new corridor that could parallel Trans Mountain, though environmental concerns could limit the terminal points in British Columbia.

Canada accounts for about 60% of total foreign deliveries to the U.S. economy. Prime Minister Carney has downplayed limits on those deliveries as part of a broader U.S. trade dispute.

By the Numbers

• 20-year offtake from Uniper is Canada's second-ever foreign LNG deal
• 1 MTPA already secured by German energy company SEFE

Key Takeaways

• Canada is slowly expanding its trade portfolio by way of energy agreements.
• Environmental concerns about maritime traffic could complicate broader strategies.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).