Ksi Lisims signs another LNG supply deal with German utility Uniper

A rendering of the Ksi Lisims LNG project in northern B.C. Ksi Lisims LNG

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The Ksi Lisims LNG project on B.C.’s North Coast has finalized a contract to sell liquefied natural gas to the German power utility Uniper, the second deal it has struck with a German firm.

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Ksi Lisims and Duesseldorf-based Uniper said in a joint statement Wednesday that the utility will buy up to two million tonnes per year of LNG over a 20-year term from the project’s planned floating LNG production facility.

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The firm supply agreement finalizes a letter of intent that Uniper and Ksi Lisims signed in June and becomes the project’s first, major, long-term deal with a utility in Germany where buyers are scrambling to diversify their supplies.

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In their joint news release, Uniper CEO Michael Lewis said the deal “is about far more than LNG” for the utility. Signing it improves the strength of its overall portfolio from a reliable source in Canada.

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“As a trusted partner, Canada helps diversify Europe’s energy supply and strengthens resilience against future disruptions,” Lewis said. “In an increasingly uncertain world, diversification is a strategic necessity.”

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Uniper is a power utility and energy trading firm based in Germany with operations in the U.K., Sweden and the Netherlands.

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Federal Natural Resources Minister Tim Hodgson called the deal “a powerful example” of the role Canada wants to play in supplying energy to allies and “support global energy security.” International Trade Minister Maninder Sidhu added in a statement that the deal marks a step in Canada’s efforts to diversify its trade.

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For Ksi Lisims, being built by Houston, Tex.-based Western LNG and backed by the Nisga’a Nation on whose territory the project will be located, the deal firms-up off take agreements for six million tonnes of LNG per year, 50 per cent of the plant’s expected capacity, moving it closer to the threshold for a final investment decision.

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“We hope to have about 75 per cent committed before (final investment decision),” Ksi Lisims spokesperson Rebecca Scott said in an emailed answer to Postmedia News questions. “(That’s) an additional three million tonnes per year.”

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Ksi Lisims, which Natural Resources Canada characterized as a $30 billion project, is aiming for a production capacity of 12 million tonnes per year from a floating terminal at Pearse Island, known as Wil Milit to the Nisga’a, 80 kilometres northeast of Prince Rupert on the North Coast.

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It has firm contracts with Dutch energy giant Shell PLC subsidiary Shell Eastern Trading Pte. Ltd and TotalEnergies, each for two million tonnes per year under similar 20-year terms.

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The project has an additional preliminary heads-of-agreement arrangement with another German gas utility, Securing Energy for Europe, to buy up to one million tonnes per year of LNG, which was unveiled at the end of May. Scott said they’re working on converting that into a binding agreement as well.