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Nisga’a Nation President Eva Clayton at a September announcement about the Ksi Lisims LNG project. The Nisga’a Nation, Western LNG and a group of Western Canadian natural gas producers called Rockies LNG are partners in the northwest B.C. project.ETHAN CAIRNS/The Canadian Press
Germany’s state-owned utility SEFE has agreed to a financial arrangement that would strengthen the planned Ksi Lisims LNG project in British Columbia.
The deal will allow Berlin-based SEFE, which is short for Securing Energy for Europe, to have the flexibility to schedule shipments of liquefied natural gas globally, according to two sources familiar with the matter.
Tim Hodgson, Canada’s Minister of Energy and Natural Resources, is slated to make the announcement on Wednesday in Vancouver with Eva Clayton, elected president of the Nisga’a Lisims government.
The Globe and Mail is not identifying the sources because they were not authorized to speak publicly on the matter.
Energy traders are able to arrange financial swap contracts worldwide that trigger the de facto delivery of LNG to Europe, instead of having liquefaction facilities in B.C. physically export to European markets, via the Panama Canal.
The Nisga’a Nation, Western LNG and a group of Western Canadian natural gas producers called Rockies LNG are partners in the Ksi Lisims project to be developed at Pearse Island, located in northwest B.C.
Ksi Lisims is expected to make a final investment decision later this year on whether to forge ahead with the West Coast development, which would need a lengthy pipeline across northern B.C. to gain access to supplies of natural gas.
Prime Minister Mark Carney announced last November that Ksi Lisims made the list of significant projects of national interest to be considered for fast-tracking by the federal government’s Major Projects Office.
LNG Canada’s Phase 2 expansion plan is also on Ottawa’s fast-tracking list.
Construction of the proposed Prince Rupert Gas Transmission (PRGT) project, which is co-owned equally by the Nisga’a Nation and Houston-based Western LNG, would stretch across 750 kilometres from northeast B.C. to the West Coast.
The $12-billion PRGT pipeline is meant to feed the $10-billion Ksi Lisims project, which would produce the fuel for export to Asia.
Over the past couple of years, Paris-based TotalEnergies SE and a unit of London-based Shell PLC have signed agreements to buy LNG from Ksi Lisims, accounting for a combined one-third of the project’s planned capacity of 12 million tonnes a year.
SEFE becomes the third purchaser in what is known in the industry as an “offtake” agreement, with a commitment to buy one million tonnes annually for up to 20 years, starting in the early 2030s.
SEFE did not respond to The Globe’s request for comment on Tuesday while a Ksi Lisims spokesperson and Natural Resources Canada declined comment. Bloomberg News first reported that SEFE reached the deal.
LNG Canada, this country’s first export terminal for the fuel, began shipping last June from Kitimat, B.C., to Asia.
Two smaller facilities in B.C. that are also planning to deliver to Asia – Woodfibre LNG near Squamish and Haisla Nation-led Cedar LNG in Kitimat – are under construction. Woodfibre expects to finish construction by late 2027 and Cedar by late 2028.
PRGT faces legal hurdles. A ruling by the B.C. Environmental Assessment Office to support the pipeline plan is unreasonable, say community leaders who took their concerns to the B.C. Supreme Court.
Lawyers for environmental law charity Ecojustice claim that the province gave the pipeline the go-ahead unfairly and before enough initial work was done. Lawyers for Ecojustice are representing the local petitioners: Skeena Watershed Conservation Coalition, Kispiox Valley Community Centre Association and resident Kathleen Larson.
The respondents counter that the initial construction was sufficient to garner the regulator’s support. The respondents are PRGT, the Nisga’a Nation and B.C. Environment Minister Tamara Davidson.
After hearings that wrapped up in Vancouver earlier this month, B.C. Supreme Court Justice Alison Latimer reserved her decision.
