Ukraine and Germany woo Canadian liquefied natural gas

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German Chancellor Olaf Scholz and his deputy Robert Habeck leave on Sunday for a trip to Canada. There they will promote the construction of a terminal to bring liquefied gas to Europe.

Ahead of Chancellor Olaf Scholz’s trip to Canada, the German government is receiving support in its bid for Canadian liquefied natural gas (LNG). Ukraine is also hoping to build an LNG terminal on the east coast of the North American country. “LNG from Canada is a much better alternative than gas from Russia,” the head of Ukrainian energy company Naftogaz, Yuri Vitrenko, told Reuters news agency on Saturday. “Canada is a democratic country that does not invade its neighbors. Canadian suppliers do not have a dominant position on the German market and do not abuse it like Gazprom, which artificially tightens supply, dominates the market and rips off its customers,” he added.

Chancellor Scholz (SPD) and Vice Chancellor Robert Habeck (Greens) leave on Sunday for a three-day trip to Canada. Officially, the government is scaling down expectations for the delivery of LNG gas from Canada. It is clear that nothing can be delivered in the next year or two anyway, because there are still no LNG export terminals on the East Coast, according to government circles in Berlin. They want to bind Canada to Germany primarily as a secure supplier of hydrogen in the future.

Ukrainian minority in Canada exerts pressure

The federal government is under pressure to find alternatives to Russian gas. But the reason for its reluctance is mainly that Scholz does not want to cause more problems for Canada’s Prime Minister Justin Trudeau. Trudeau’s delivery to Germany of a Siemens Energy gas turbine for the Nord Stream 1 Baltic Sea pipeline, which was serviced in his country, has already drawn fierce domestic criticism, especially from the country’s large Ukrainian minority. And in the province of Quebec, there is considerable opposition to the construction of an LNG terminal, including from environmental groups. The provinces are responsible, which is why Scholz and Habeck are also meeting with the Premier of Quebec.

In addition, the cost of transporting gas to the East Coast would be higher than to the West Coast of the country. “We’re working through these issues. But I would say the big opportunity on the East Coast is in hydrogen,” Canadian Natural Resources Minister Jonathan Wilkinson told Reuters. The federal government is promoting the idea that an LNG terminal could be built after all – from which green hydrogen would later be exported to Europe. Dual use is also planned for LNG land terminals on the German coast.

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Now the German-Ukrainian closing of ranks could help in the debate – precisely because of Kiev’s influence on the Ukrainian minority in Canada. Already on June 13, state-owned Naftogaz and the Canadian company Symbio, which is behind the LNG project Energie Saguenay in the east, had concluded a memorandum of understanding for the supply of LNG and hydrogen. The export terminal is expected to have a capacity of 15 billion cubic meters of gas per year in the plans of both companies. “Canadian LNG from Symbio is much more environmentally friendly than gas from Gazprom,” Naftogaz CEO Yuri Vitrenko promotes to environmentalists. Due to “superior technologies and care,” much less methane and CO2 emissions would be released.

Whether the two European countries will succeed, however, is still unclear. That’s because in recent months, Canada and Germany had already been discussing behind the scenes what options there are for LNG terminals on the East Coast. Canada’s Environment Minister Steven Guilbeault had told Reuters in June that Repsol’s New Brunswick facility was the most viable project. “The economics of LNG on the West Coast are almost certainly better than LNG on the East Coast, given how far apart the transportation requirements are,” Wilkinson had said.

Nevertheless, hopes are high that Western democracies and G-7 partners will help European countries become independent of Russian gas in light of the Russian attack on Ukraine. In a Reuters interview, the German government’s transatlantic coordinator, Michael Link (FDP), also advocated for a terminal in eastern Canada. But delivering Canadian liquefied natural gas to Asia from the West Coast through the two LNG terminals already approved there would also help, he stressed. “Since the gas exported from there will go to the world market, it will increase supply and bring prices down.”

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Salih Demir

Salih Demir lives in Germany. He is interested in politics and economy. Germany editor of -ancient idea-