Canada has entered renewed discussions with Germany on supplying liquefied natural gas, Prime Minister Mark Carney said Tuesday — a prospect critics say must have grow to be reality years ago.
Speaking alongside German Chancellor Friedrich Merz in Berlin, Carney said his government will make announcements “in the subsequent two weeks” on latest port infrastructure funding, which could mark the primary major “national interest” projects approved under laws passed within the spring.
Carney specifically identified the Contrecoeur expansion of the Port of Montreal, which is about to extend container capability by as much as 40 per cent, and revitalizing the Churchill port in northern Manitoba.
The latter project “would open up enormous LNG (export potential), plus other opportunities” for shipping critical minerals and metals to Europe, Carney said, creating “a brand new port, effectively.”
Talking to reporters in Berlin at a separate event, Energy Minister Tim Hodgson said the goal being sold by Canadian proponents to German buyers “is with the ability to ship in as little as five years.”
Adam Pankratz, a school lecturer on the University of British Columbia’s Sauder School of Business, said the brand new timeline is “theoretically feasible,” but he’s not holding his breath.
“I might view every little thing the federal government says with the context of the last (few) years of not with the ability to get anything done,” he said in an interview.
“Until we see that the situation has definitively modified, I don’t consider there’s any reason to take the federal government at their word on anything on this file, even when I’m hopeful that that’s the change that’s underfoot.”
Has the ‘business case’ modified?
In 2022, months after Russia’s invasion of Ukraine led Germany and other European nations to search for alternatives to Russian oil, then-prime minister Justin Trudeau publicly questioned the “business case” for Canada becoming an LNG supplier across the Atlantic.
“There are various potential projects … which can be on the books for which there has never been a powerful business case due to the distance from the gas fields,” Trudeau told reporters on the time alongside then-German chancellor Olaf Scholz.
“We’re looking without delay, and corporations are looking, at whether the brand new context makes it a worthwhile business case to make those investments.”
Exactly three years later, Hodgson said the business case has indeed modified.
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“I believe there was a view prior to just a few years ago that the necessity for natural gas can be relatively minor and comparatively short-term,” he said.
“I believe what all of us realize post-Ukraine, post what’s happening with AI, that natural gas goes to be a transition fuel that’s in greater demand in Germany and for an extended time period. Canada has the chance to be an excellent partner to Germany in that regard.”
One other change, Hodgson said, is the launch of LNG Canada’s first shipments of liquefied gas to Asia in June from its just-opened export facility in Kitimat, B.C.
The primary phase of the project is anticipated to export 14 million tonnes of gas per 12 months. A second phase into consideration would double that output.
Five other export facilities are in various stages of construction or regulatory approval — all of them in British Columbia, and all of them geared toward supplying LNG to Asia. The projects are expected to start operating between 2027 and 2030.
Efforts to construct export capability on the East Coast have been harder. A planned expansion of the Saint John LNG facility in Latest Brunswick that will allow for export died in 2023 when the Spanish company behind the proposal balked at rising costs.
The Quebec government rejected a proposal for an LNG facility in Quebec’s Saguenay region in 2021, amid widespread opposition to the project.
Yet in recent months, Premier François Legault has repeatedly said Quebecers are more open to fossil-fuel projects within the province on account of the continuing trade war with the USA.
In July, Legault confirmed that members of his team have met with representatives of Marinvest Energy Canada, a brand new subsidiary of a Norwegian energy company that claims it wants to construct an LNG export facility in Quebec.
The premier said on the time that the project, which can be built along the north shore of the St. Lawrence River within the province’s Côte-Nord region, was “very preliminary.”
Pankratz notes that, along with constructing port and storage capability, a brand new pipeline from Western Canada would even be obligatory for LNG export. That too, he says, is feasible but doubtful given the “enormous hurdles” involved.
“Except for just the physical building-out of the pipeline, you may have to seek out an organization who wants to construct it,” he said.
“You could have to get First Nations on board, you may have to get communities on board. And you’d essentially must don’t have any challenge or resistance, or be willing to expend an infinite amount of political capital to only ram it through. And I view that as most unlikely.”
Manitoba Premier Wab Kinew told reporters on Tuesday that his government has been making the case to Carney and federal cabinet ministers for the Port of Churchill as a “national interest” project.
He said the port offers a competitive advantage, given its location each within the North and closer to Western Canada, and was encouraged to listen to Carney echoing those points in Germany.
Carney has said any project built under the federal major projects law, which goals to fast-track approvals and reviews to inside two years, would require buy-ins from First Nations and native governments, in addition to meeting environmental criteria.
Conservatives have called on the Liberal government to repeal existing energy project regulatory laws to further fast-track approvals and get projects built, arguing builders need certainty to take a position in Canada.
Hodgson on Tuesday said he met with “an awful lot of German firms that were pretty involved in working with us.”
Canada is now also racing against the USA, which became the biggest global exporter of LNG within the seven years it took to construct the primary phase of LNG Canada.
Three latest facilities anticipated to begin operations by the top of next 12 months could increase the country’s LNG export capability by 50 per cent, in line with the U.S. Energy Information Administration.
U.S. President Donald Trump’s latest trade cope with the European Union features a commitment to buy US$750 billion in American oil and gas in the subsequent 4 years, a pledge analysts have said is unfeasible.
The EU had already had a deal in place since 2022 to purchase American LNG after Russia invaded Ukraine.
That doesn’t mean Canada isn’t facing pressure, nevertheless, as allies proceed to sign energy deals with one another in a bid to counter Russia, in addition to China and other adversarial nations.
“We’re desperate,” Pankratz said. “The economic case (for selling LNG to Europe) is similar (because it was three years ago), however the economic need is bigger.”
The Expert Group on Canada-U.S. Relations at Carleton University, in a white paper on the longer term of Canada’s energy sector released in July, said LNG infrastructure ought to be amongst the foremost projects approved inside the subsequent six months, a timeframe the group said was “critical” to make sure the latest law is successful.
It said LNG alone could increase Canada’s GDP by not less than $11 billion per 12 months.
“If Canada doesn’t get its act together … it’s the largest economic policy failure in a long time,” Pankratz said. “It’s just unbelievable if we miss this chance.”
— with files from The Canadian Press