Canada Signs LNG Deal with Germany's State-Owned SEFE

• Canada and Germany signed a landmark 20-year LNG supply deal, diversifying Canadian exports away from the US.

• The Ksi Lisims project faces mounting legal, environmental, and political opposition despite government backing.

By Emirsyah Kevin Mecca, Attala Sabian Andhika, Maria Ella Risandra Puruhita, Nashwah Putri Az-Zahra

May 29 2026, at 16:30 GMT+7

Canada has reached a historic energy agreement with Germany, marking the first-ever long-term shipment of liquefied natural gas (LNG) from Canada to Europe.

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Announced in Vancouver by Canadian Energy Minister Tim Hodgson, the deal outlines the SEFE’s intent to purchase 1 million tons of LNG per year from the Ksi Lisims project located on British Columbia's Pacific coast. Deliveries are expected to begin in the early 2030s and will continue for up to 20 years.

Hodgson views the agreement as an exciting and important milestone, depicting it as a major step towards trade diversification away from the US. The Ksi Lisims project has been designated a national priority by Prime Minister Mark Carney and is eligible for a fast-track review process.

Minister of Energy and Natural Resources of Canada, Tim Hodgson, makes an announcement regarding liquefied natural gas with B.C. Minister of Energy and Climate Solutions Adrian Dix, left, and B.C. Premier David Eby | Source: BNN Bloomberg

For Canada, the deal represents a major step toward trade diversification, as virtually all of its LNG exports went to the US in 2024.

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Hodgson cited Canada's reliable democracy and abundant natural resources as competitive advantages, stating that Canada can fill the energy supply gap left by Russia's invasion of Ukraine and the ongoing war in Iran and the Middle East region. 

For Germany, the deal strengthens energy security by locking in a reliable long-term supply from a Strategic ally. Hodgson stated that the new commitment would help secure a final investment decision for the Ksi Lisims project within months, with construction expected to begin shortly after funding is secured.

Canadian LNG Export Facility | Source: LNG Canada

Despite the optimism surrounding the deal, the Ksi Lisims project continues to face significant opposition. More than a dozen Indigenous and environmental groups have vowed to fight the development, arguing that it remains legally contested and poses environmental risks.

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Alex Walker from Environmental Defence described it as a high-risk fossil fuel project that has struggled to attract investments for decades, with several First Nations launching legal challenges against it. 

Fourteen Liberal MPs signed a letter conveying deep concern over what they say is a backslide on environmental commitments, while former environment minister Steven Guilbeault announced his resignation from caucus, reflecting his growing resistance towards the deal.

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Sources:

BBC

Reuters