European LNG buyers, including Germany's Uniper, are exploring the possibility of purchasing supplies from Canada's Pacific coast and shipping it through the Panama Canal.
This is part of a long-term strategy to diversify supply, an effort made more urgent in the wake of the Iran war, two industry sources told Reuters.
Three sources said European buyers are among the potential customers that have held commercial talks with Canada's Ksi Lisims LNG project developers who have been working to finalise contracts with purchasers before making an expected final investment decision this year.
The interest in Ksi Lisims from European buyers — who include state-owned German energy group Uniper, according to two sources — was said to be significant, as Canada's burgeoning LNG export industry is geographically more suited to supplying Asia, as tolls and transit times through the Panama Canal will increase costs.
Almost all of Canada's entire existing and emerging LNG export capacity is located on the west coast, offering shorter sailing times to Asia, while its east coast has virtually no infrastructure beyond Repsol's Saint John terminal.
Lack of infrastructure had long been seen as a barrier to Canadian LNG supplies to Europe. But a source familiar with the Ksi Lisims LNG project told Reuters that the Middle East conflict had meant that European buyers were considering accepting the costs and longer voyage times of Panama Canal transits in order to diversify their supply sources to a stable, democratic jurisdiction like Canada.
"Since the war in Iran started, there has been especially strong interest in (Ksi Lisims) offtake from LNG buyers all around the world, including from Europe," the source said.
Reuters reported last month that Uniper was in talks with Canada at a corporate and political level to expand its LNG purchases. The US accounted for 96% of Germany's LNG imports last year, and two sources said Ksi Lisims is seen having potential when it comes to diversifying that supply.
The Ksi Lisims project is not an immediate solution to Europe's energy needs, as even if the developers — Houston-based Western LNG; a consortium of Canadian natural gas producers called Rockies LNG; and the Nisga'a First Nation, who own the land — decide to declare a FID, it will take several years before it comes online.
However, the project has been earmarked for fast-tracking.
Shell and TotalEnergies have already signed 20-year LNG purchase agreements with Ksi Lisims.
The Iran war and the resulting Strait of Hormuz closure have made it increasingly likely that Ksi Lisims will get built, said Jamie Heard, Tourmaline Oil’s Vice President, Capital Markets, one of the Rockies LNG partners behind the project.
He said Western Canadian natural gas prices continue to lag behind the U.S. benchmark, making a strong business case for Canadian LNG.
"The economic rationale is there, these projects can pay themselves off quite quickly with spreads at that level," Heard said in an interview. (April 16, 2026, Source: https://lngjournal.com/index.php/latest-news-mainmenu-47/item/116092-europe-looks-to-canadian-lng-supplies)
EUROPE - CANADA - LNG - SUPPLIES - IMPORTS - EXPORTS