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Market Chatter: Canada, Germany Expected to Announce Major LNG Supply Agreement

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Canada plans to supply Germany with liquefied natural gas from the proposed CA$10 billion ($7.24 billion) Ksi Lisims export project, The Wall Street Journal reported Tuesday, citing people familiar with the matter.

The LNG will come from the Ksi Lisims floating export facility in British Columbia, which already secured regulatory approval, according to the sources.

Germany's SEFE, the former Gazprom unit that Berlin nationalized after Russia invaded Ukraine, will buy the LNG under the proposed agreement, the report said.

Canadian Energy Minister Tim Hodgson is expected to announce the deal on Wednesday, according to people cited in the report.

Blackstone-backed Western LNG, Rockies LNG Partners, and the Nisga'a Nation support the Ksi Lisims project, which plans to operate on Indigenous-owned land in British Columbia.

Developers still need a final investment decision before construction begins, though the facility could eventually produce 12 million metric tons of LNG annually, nearly matching LNG Canada's first phase capacity.

Hodgson said European countries are seeking stable gas suppliers as conflicts disrupt energy flows from Russia and the Middle East, according to a recent Bloomberg News interview cited in the report.

European buyers also want to avoid overreliance on US LNG due to trade tensions with the Trump administration and broader concerns about supply concentration, Hodgson said.

"We can be that reliable supplier who will not use energy for coercion," Hodgson said, adding that Canada's west coast LNG growth offers Europe a near-term supply option.

Hodgson said some LNG shipments could transit the Panama Canal, while others may be rerouted globally via cargo swaps and alternative shipping routes.

Canada and Europe should deepen energy ties as major powers increasingly use trade and energy for geopolitical leverage, Hodgson said, adding that European nations are seeking suppliers that share similar values.

Ministry of Energy and Natural Resources of Canada, Western LNG, and SEFE didn't immediately respond to' request for comment.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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