Canada signs second European LNG supply deal as Ksi Lisims nears FID
Ottawa locks in another German offtaker for BC export project, aiming for final investment decision by year-end.
Canada signed its second long-term LNG supply agreement with a European buyer on Wednesday (2026-07-29), as the proposed Ksi Lisims export facility in British Columbia locks in offtake commitments needed to trigger a final investment decision.7
The deal with Germany’s state-owned SEFE follows a May (2026-05-20) agreement for 1 million tonnes per annum from the same 12 mtpa floating LNG project, which is backed by Blackstone-funded Western LNG, Rockies LNG Partners and the Nisga’a Nation.1,4
Ksi Lisims now has offtake contracts covering roughly 5 million tons per year, according to Western LNG’s chief executive. The project needs commitments for another 3 to 4 million tons before the consortium can issue the final investment decision, targeted for the end of 2026.2,3
German utility Uniper deepened its involvement in June (2026-06-08), signing a letter of interest to offtake 2 mtpa from the facility. That brought the number of European buyers circling the project to at least three.5,6
The push matters because Europe lost roughly 130 billion cubic metres of Russian pipeline gas after the Ukraine war began, and those flows have not returned. German buyers like SEFE — nationalised for €6.3 billion in 2022 after Gazprom abandoned the unit — are under political pressure to diversify supply without adding emissions.1,3
Ksi Lisims claims its electric-driven LNG trains will be powered by British Columbia’s hydroelectric grid, cutting emissions 94% below the global average once operational. Eva Clayton, President of Nisga’a Lisims Government, said European buyers “should not have to choose between energy security and climate ambition.”3
The project would be Canada’s second LNG export facility and, at 12 mtpa, its largest. Canada has only one operating LNG terminal — Shell’s LNG Canada in Kitimat — which shipped its first cargo in January 2025 after years of delays.1
Ottawa is framing the deals as a direct hedge against US trade risk. Canadian Energy Minister Tim Hodgson said in a May (2026-05-26) interview that European nations are “actively looking” for alternatives to Russian and Gulf gas. The announcement Wednesday (2026-07-29) said the project could contribute C$15 billion to Canada’s GDP.4,7
ICE Endex TTF front-month traded at €60.52/MWh on Wednesday (2026-07-29), up 4.72% on the session, as the broader market priced in a tight winter outlook. Asian JKM held flat at $21.32/MMBtu. [prices block]
The big unresolved question is whether the remaining 3 to 4 mtpa of offtake comes through in time for a year-end FID. Buyers are weighing 15-year contract terms against a volatile LNG price outlook and potential competition from US Gulf Coast projects that can deliver into the same European regas terminals.2
If FID slips into 2027, first LNG from Ksi Lisims — which would take roughly four years to build — would not arrive until after 2030. That would leave European buyers, particularly Germany, still reliant on spot LNG cargoes from Qatar and the US through the middle of the next decade.2