Canada wants to sell LNG to Germany. Critics say it’s a race against time – National

Canada has entered renewed discussions with Germany on supplying liquefied natural gas, Prime Minister Mark Carney said Tuesday — a prospect critics say should have become reality years ago.

Speaking alongside German Chancellor Friedrich Merz in Berlin, Carney said his government will make announcements “in the next two weeks” on new port infrastructure funding, which could mark the first major “national interest” projects approved under legislation passed in the spring.

Carney specifically identified the Contrecoeur expansion of the Port of Montreal, which is set to increase container capacity by as much as 40 per cent, and revitalizing the Churchill port in northern Manitoba.

The latter project “would open up enormous LNG (export potential), plus other opportunities” for shipping critical minerals and metals to Europe, Carney said, creating “a new port, effectively.”

Speaking to reporters in Berlin at a separate event, Energy Minister Tim Hodgson said the goal being sold by Canadian proponents to German buyers “is being able to ship in as little as five years.”

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Adam Pankratz, a faculty lecturer at the University of British Columbia’s Sauder School of Business, said the new timeline is “theoretically feasible,” but he’s not holding his breath.

“I would view everything the government says with the context of the last (few) years of not being able to get anything done,” he said in an interview.

“Until we see that the situation has definitively changed, I don’t believe there’s any reason to take the government at their word on anything on this file, even if I am hopeful that that is the change that is underfoot.”

In 2022, months after Russia’s invasion of Ukraine led Germany and other European nations to look for alternatives to Russian oil, then-prime minister Justin Trudeau publicly questioned the “business case” for Canada becoming an LNG supplier across the Atlantic.

“There are a number of potential projects … that are on the books for which there has never been a strong business case because of the distance from the gas fields,” Trudeau told reporters at the time alongside then-German chancellor Olaf Scholz.

“We are looking right now, and companies are looking, at whether the new context makes it a worthwhile business case to make those investments.”

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Trudeau says strong ‘business case’ needed to increase LNG exports to Germany

Exactly three years later, Hodgson said the business case has indeed changed.

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“I think there was a view prior to a few years ago that the need for natural gas would be relatively minor and relatively short-term,” he said.

“I think what we all realize post-Ukraine, post what’s happening with AI, that natural gas is going to be a transition fuel that’s in greater demand in Germany and for a longer period of time. Canada has the opportunity to be a great partner to Germany in that regard.”

Another change, Hodgson said, is the launch of LNG Canada’s first shipments of liquefied gas to Asia in June from its just-opened export facility in Kitimat, B.C.

The first phase of the project is expected to export 14 million tonnes of gas per year. A second phase under consideration would double that output.

Five other export facilities are in various stages of construction or regulatory approval — all of them in British Columbia, and all of them aimed at supplying LNG to Asia. The projects are expected to begin operating between 2027 and 2030.

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Efforts to build export capacity on the East Coast have been more difficult. A planned expansion of the Saint John LNG facility in New Brunswick that would allow for export died in 2023 when the Spanish company behind the proposal balked at rising costs.

The Quebec government rejected a proposal for an LNG facility in Quebec’s Saguenay region in 2021, amid widespread opposition to the project.

Yet in recent months, Premier François Legault has repeatedly said Quebecers are more open to fossil-fuel projects in the province due to the ongoing trade war with the United States.

In July, Legault confirmed that members of his team have met with representatives of Marinvest Energy Canada, a new subsidiary of a Norwegian energy company that says it wants to build an LNG export facility in Quebec.

The premier said at the time that the project, which would be built along the north shore of the St. Lawrence River in the province’s Côte-Nord region, was “very preliminary.”

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Pankratz notes that, in addition to building port and storage capacity, a new pipeline from Western Canada would also be necessary for LNG export. That too, he says, is possible but doubtful given the “enormous hurdles” involved.

“Aside from just the physical building-out of the pipeline, you have to find a company who wants to build it,” he said.

“You have to get First Nations on board, you have to get communities on board. And you would essentially have to have no challenge or resistance, or be willing to expend an enormous amount of political capital to just ram it through. And I view that as very unlikely.”

Manitoba Premier Wab Kinew told reporters on Tuesday that his government has been making the case to Carney and federal cabinet ministers for the Port of Churchill as a “national interest” project.

He said the port offers a competitive advantage, given its location both in the North and closer to Western Canada, and was encouraged to hear Carney echoing those points in Germany.

Carney has said any project built under the federal major projects law, which aims to fast-track approvals and reviews to within two years, would require buy-ins from First Nations and local governments, as well as meeting environmental criteria.

Conservatives have called on the Liberal government to repeal existing energy project regulatory laws to further fast-track approvals and get projects built, arguing builders need certainty to invest in Canada.

Hodgson on Tuesday said he met with “an awful lot of German companies that were pretty interested in working with us.”

Canada is now also racing against the United States, which became the largest global exporter of LNG in the seven years it took to build the first phase of LNG Canada.

Three new facilities anticipated to start operations by the end of next year could increase the country’s LNG export capacity by 50 per cent, according to the U.S. Energy Information Administration.

U.S. President Donald Trump’s new trade deal with the European Union includes a commitment to purchase US$750 billion in American oil and gas in the next four years, a pledge analysts have said is unfeasible.

The EU had already had a deal in place since 2022 to buy American LNG after Russia invaded Ukraine.

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That doesn’t mean Canada isn’t facing pressure, however, as allies continue to sign energy deals with each other in a bid to counter Russia, as well as China and other adversarial nations.

“We’re desperate,” Pankratz said. “The economic case (for selling LNG to Europe) is the same (as it was three years ago), but the economic need is greater.”

The Expert Group on Canada-U.S. Relations at Carleton University, in a white paper on the future of Canada’s energy sector released in July, said LNG infrastructure should be among the major projects approved within the next six months, a time frame the group said was “critical” to ensure the new law is a success.

It said LNG alone could increase Canada’s GDP by at least $11 billion per year.

“If Canada doesn’t get its act together … it’s the biggest economic policy failure in decades,” Pankratz said. “It’s just unbelievable if we miss this opportunity.”

— with files from The Canadian Press