Ksi Lisims has secured a third offtake agreement, but this time with a European buyer that will likely require creative shipping logistics to get the product to market. 

A source with knowledge of the matter told iPolitics the proposed B.C. liquified natural gas project is expected to announce a supply agreement with SEFE, an international energy company headquartered in Germany.

iPolitics is not naming the source as they were not authorized to speak publicly.

Federal Energy Minister Tim Hodgson is expected to be in Vancouver Wednesday for the announcement. 

Ksi Lisims’ reported supply deal with SEFE comes weeks after Reuters reported European buyers were exploring the possibility of purchasing natural gas from Canada’s Pacific coast and shipping it through the Panama canal. 

The reporting suggested European customers were willing to face the added costs and longer shipping times as part of the push to diversify LNG sources in the wake of the war on Iran. 

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Western Canadian natural gas prices also continue to trail behind the U.S. benchmark, increasing the appeal of Canadian LNG.

It is not clear yet whether SEFE intends on shipping through the Panama canal. More details are expected to be revealed Wednesday.

SEFE recently made a call for medium-term LNG deliveries covering the period 2027 to 2036 to feed northwest European terminals. Under that tender, contacts range from one to 10 years. The German multinational recently entered into a purchase agreement with Argentina’s Southern Energy for 2 million tonnes per year on a free on board basis, with deliveries scheduled to begin late next year. Free on board usually means the buyer arranges, pays and assumes liability for shipping.

Other deals in the works

Ksi Lisims’ previously signed 20-year purchase agreements with Shell and TotalEnergies. 

Under the Shell deal, the company agreed to purchase 2 million tonnes of LNG per year from Ksi Lisims on a free-on-board basis. 

The source told iPolitics Ksi Lisims is negotiating other deals, including one with another major European buyer. Talks with potential clients in Asia are also ongoing, according to the source. 

Reuters previously named Uniper as one of the firms negotiating with Ksi Lisims.

This latest offtake agreement comes as the partners behind the project – Houston-based Western LNG, Rockies LNG, and Nisga’a First Nation – prepare to make a final investment decision in the coming months. 

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The project would involve building a $10B floating LNG terminal near the community of Gingolx by Prince Rupert and a new estimated $12B gas transmission pipeline. 

B.C. took over the assessment process from the federal government in 2023, and issued a certificate of approval last September. The project could become operational in 2029.

The Lax Kw’alaams Band and the Metlakatla First Nation have filed judicial review applications over the approval.

Meanwhile, the Carney government referred Ksi Lisims to the Major Projects Office for potential fast-tracking under the Building Canada Act last fall, along with LNG Canada Phase 2.

In total, there are seven LNG export projects in various stages of development in Canada, including relatively smaller projects Woodfibre LNG, Tilbury LNG, and Cedar LNG.

But despite its energy superpower ambitions, Canada remains a relatively small LNG exporter, with the U.S., Australia and Qatar accounting for the majority of global trade.