Germany’s Uniper opens talks to buy Canadian LNG

Germany’s state-run energy company Uniper has begun negotiations with Canada to buy LNG from the fledgling producer, Reuters reported on March 5 citing sources familiar with the matter.

The news comes on the back of recent statements by European officials that they would explore LNG deals with new partners, such as Canada, while also looking to increase imports from Qatar and North Africa.

Facing continued tariff threats from US President Donald Trump, European Union officials have called Trump’s rhetoric a “wake-up call” and have vowed to develop new strategic alliances and reduce reliance on Washington.

In August, Canadian Prime Minister Mark Carney and German Chancellor Friedrich Merz discussed LNG sales during a meeting in Berlin, where the two countries reaffirmed their commitment to constructing a hydrogen trade corridor.

The two countries appear to be natural partners, with Germany going all-in on LNG pivoting away from Russian pipeline gas following its invasion of Ukraine in February 2022.

Germany’s flagship floating LNG (FLNG) terminal opened in the North Sea port of Wilhelmshaven in December 2022. Germany currently has five operating LNG import terminals with three more under construction.

The country is planning to top 70mn tonnes per year (tpy) of LNG capacity by 2030 with a total of ten LNG import terminals by then. Reaching that level of imports would put Germany as the fourth biggest importer in the world behind just China, Japan, and South Korea.

While Canada is ramping up its LNG production, a few major hurdles exist preventing it from shipping the super-chilled fuel to Germany. Canada’s gas is concentrated in its western provinces and it lacks the pipeline infrastructure to move it to the east coast.

Canada also does not have an LNG export terminal on its eastern coast. Talks have been held to convert Saint John LNG, which is owned by Spanish energy firm Repsol. However, the project has yet to receive the green light.

Preliminary discussions have also been held on building an LNG export terminal in Fermeuse, Newfoundland. However, the proposed project has yet to gain much momentum and remains in its infancy.