VBefore Chancellor Olaf Scholz travels to Canada, the federal government receives support in promoting 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,” Ukrainian energy company Naftogaz boss Yuriy Vitrenko told Reuters on Saturday. “Canada is a democratic country that does not invade its neighbors. Canadian operators do not dominate 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) set off on a three-day trip to Canada on Sunday. Officially, the government is lowering the expectation for the delivery of LNG gas from Canada. It is clear that nothing can be delivered in the next one or two years anyway because there are still no LNG export terminals on the east coast, according to government circles in Berlin. Above all, the aim is to bind Canada to Germany as a reliable supplier of hydrogen in the future.
The Ukrainian minority in Canada is exerting pressure
The federal government is under pressure to find alternatives to Russian gas. But the main reason for the reluctance is that Scholz doesn’t want to cause any more problems for Canada’s Prime Minister Justin Trudeau. After all, Trudeau received fierce domestic political criticism for the delivery of a gas turbine serviced in his country by Siemens Energy for the Nord Stream 1 Baltic Sea pipeline to Germany – especially from the large Ukrainian minority in the country. And in the province of Quebec, there is significant opposition to building an LNG terminal, including from environmental groups. The provinces are responsible, which is why Scholz and Habeck also meet the Prime Minister 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 work our way through these questions. 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 – from which green hydrogen will later also be exported to Europe. Dual use is also planned for the LNG landing terminals on the German coast.
Now the German-Ukrainian solidarity in the debate could help – precisely because of Kiev’s influence on the Ukrainian minority in Canada. As early as June 13, the state-owned company Naftogaz and the Canadian company Symbio, which is behind the LNG project Energie Saguenay in the east, signed a declaration of intent for the delivery of LNG and hydrogen. According to the plans of both companies, the export terminal should have a capacity of 15 billion cubic meters of gas per year. “Canadian LNG from Symbio is much more environmentally friendly than gas from Gazprom,” Naftogaz boss Yuri Vitrenko advertises to environmentalists. Much less methane and CO2 emissions would be released due to “superior technologies and care”.
However, it is still unclear whether the two European countries will be successful. For the past few months, Canada and Germany have been discussing behind the scenes what options there are for LNG terminals on the East Coast. Canada’s Environment Minister Steven Guilbeault told Reuters in June that the Repsol plant in New Brunswick was the most viable project. “The economics of West Coast LNG are almost certainly better than East Coast LNG given how remote the transportation requirements are,” Wilkinson had said.
Still, hopes are high that Western democracies and G-7 partners will help European countries become independent of Russian gas in the face of the Russian attack on Ukraine. The federal government’s transatlantic coordinator, Michael Link (FDP), also advocated a terminal in eastern Canada in a Reuters interview. But the delivery of Canadian liquefied natural gas to Asia from the west coast through the two LNG terminals already approved there would also help, he emphasized. “Since the gas exported from there will go to the world market, the supply will increase and prices will fall.”