{"id":66993,"date":"2025-09-02T11:19:09","date_gmt":"2025-09-02T18:19:09","guid":{"rendered":"https:\/\/energi.media\/?p=66993"},"modified":"2025-09-02T11:19:09","modified_gmt":"2025-09-02T18:19:09","slug":"lng-export-push-depends-on-future-eu-gas-demand-exploratory-discussions-with-buyers","status":"publish","type":"post","link":"https:\/\/energi.media\/news\/lng-export-push-depends-on-future-eu-gas-demand-exploratory-discussions-with-buyers\/","title":{"rendered":"LNG export push depends on future EU gas demand, \u2018exploratory discussions\u2019 with buyers"},"content":{"rendered":"<p><em>This article was published by <a href=\"https:\/\/www.theenergymix.com\/lng-export-push-depends-on-future-eu-gas-demand-exploratory-discussions-with-buyers\/\" target=\"_blank\" rel=\"noopener\">The Energy Mix<\/a> on Aug. 30, 2025.<\/em><\/p>\n<p><em><strong>By Mitchell Beer<\/strong><\/em><\/p>\n<p>The Canadian government will depend on continuing gas demand from Europe and \u201cexploratory discussions\u201d with potential trading partners in Germany to back up Energy and Natural Resources Minister Tim Hodgson\u2019s pledge last week to deliver a first LNG shipment to Europe in \u201cas little as five years\u201d.<\/p>\n<p>The emerging gas export plan may also hinge on the prospect of liquefied natural gas \u201cswaps\u201d on international markets, according to news reports.<\/p>\n<p>Last week, Hodgson joined Prime Minister Mark Carney in Berlin to\u00a0<a href=\"https:\/\/www.theenergymix.com\/breaking-canada-pushes-for-lng-exports-to-germany-in-as-little-as-five-years\/\">launch<\/a>\u00a0a major LNG export push, including new port infrastructure under consideration in\u00a0<a href=\"https:\/\/www.cbc.ca\/news\/canada\/manitoba\/port-of-churchill-federal-government-project-1.7618212\">Churchill, Manitoba<\/a>\u00a0and Montreal. The announcement has Canada positioning itself as a key supplier of gas and critical minerals to Europe\u2019s energy transition and resource security.<\/p>\n<p>In an email to\u00a0<em>The Mix<\/em>\u00a0Friday afternoon, a senior media relations advisor in Hodgson\u2019s department, Natural Resources Canada (NRCan), laid out some of the conditions and assumptions behind the top-line announcement.<\/p>\n<p>\u201cWhile in Germany, [fossil] energy companies and stakeholders expressed strong interest in Canadian LNG,\u201d she wrote. \u201cThis was also part of discussions with industry and government. Lower-carbon Canadian LNG could offer Germany the opportunity to displace Russian gas with reliable, stable supply from Canada that would advance their goal of ending imports of Russian energy.\u201d<\/p>\n<p>But \u201cthese are very much exploratory discussions at this time,\u201d the advisor added.<\/p>\n<p>\u201cCommercially viable projects that have the support of the province, and affected Indigenous communities will be considered by the federal government. Regulatory approvals would follow existing processes and the decision to build lies with proponents and investors.\u201d<\/p>\n<h2 class=\"wp-block-heading\">Future Gas Demand Vs. Massive Energy Savings<\/h2>\n<p>The NRCan advisor acknowledged projections from the International Energy Agency that European gas demand will fall 9 per cent between 2023 and 2030, but said the continent\u2019s total consumption will \u201cremain substantial\u201d at decade\u2019s end, at 44.7 billion cubic feet (bcf) per day.<\/p>\n<p>\u201cLNG demand in particular will remain robust,\u201d she wrote, citing the Wood Mackenzie energy analytics firm. WoodMac\u2019s modelling \u201canticipates that European LNG demand will peak by the mid-2030s (roughly 30 million tonnes above current anticipated demand of 116 million tonnes, in 2025). The majority of that LNG demand is uncontracted beyond 2035, which offers opportunities for Canadian exports.\u201d<\/p>\n<p>But that doesn\u2019t indicate any certainty for projects that require 15 or 20 years of demand to justify major new investment. Last week, a joint reporting effort by\u00a0<em>The Mix<\/em>\u00a0and Berlin-based Clean Energy Wire found multiple analysts who see limited prospects for future LNG trade.<\/p>\n<p>\u201cIn the medium and long term, we\u2019re not anticipating an increase in gas demand, certainly not in Western Europe,\u201d Pawel Czyzak, Europe programme director at the Ember energy think tank, said in an email. EU gas demand fell 17 per cent between 2021 and 2024, spurred largely by the energy shock following Vladimir Putin\u2019s invasion of Ukraine, and consumption will continue to shrink through 2030 as Europe electrifies its economy.<\/p>\n<p>That means the continent \u201cis already heavily oversupplied towards 2030,\u201d he said, and \u201cthat oversupply will get even more severe if the\u00a0<a href=\"https:\/\/www.theenergymix.com\/delusional-pie-in-the-sky-u-s-eu-energy-deal-shows-trump-losing-in-global-trade-talks\/\" target=\"_blank\" rel=\"noreferrer noopener\">questionable fossil fuel imports<\/a>\u00a0from the EU-U.S. trade [and tariff deal] are implemented.\u201d<\/p>\n<p>Ana Maria Jaller-Makarewicz, lead energy analyst, Europe with the Institute for Energy Economics and Financial Analysis (IEEFA), said the EU is\u00a0<a href=\"https:\/\/ieefa.org\/resources\/eu-gas-imports-fall-25-2030-demand-reduction-target-exceeded-once-again\">on track<\/a> to reduce its gas imports 25 per cent by 2030 under\u00a0<a href=\"https:\/\/www.theenergymix.com\/eu-to-cut-russian-gas-use-65-this-year-as-analysts-urge-faster-shift-to-renewables\/\">REPowerEU<\/a>, its plan to end its dependency on Russian fossil fuels by 2027 through increased energy efficiency, faster growth in renewable energy, and diversified energy supplies. The plan\u00a0<a href=\"https:\/\/www.consilium.europa.eu\/en\/press\/press-releases\/2024\/03\/04\/security-of-gas-supply-member-states-agree-on-recommendation-to-continue-voluntary-demand-reduction-measures\/#:~:text=Extended%20period%20for%20voluntary%20demand,2017%20to%2031%20March%202022.\">included<\/a>\u00a0voluntary gas reduction targets for 2022, 2023, and 2024, an the bloc exceeded its targets for the first two years, though Jaller-Makarewicz\u00a0<a href=\"https:\/\/ieefa.org\/resources\/two-years-repowereu-gas-reduction-track-latest-target-raises-risks\">warned<\/a>\u00a0in a May, 2024 commentary that EU targets for 2024 and 2025 could allow for increased gas use.<\/p>\n<p>Even so, \u201cEU efforts to curb gas demand and diversify energy sources have been vital for Europe\u2019s security of supply,\u201d she told\u00a0<em>The Mix<\/em>\u00a0in an email. \u201cCutting dependency on gas from Russia or any other country can be achieved if gas consumption reduction measures continue in place.\u201d<\/p>\n<p>With an affordable energy action plan set to replace up to\u00a0<a href=\"https:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/HTML\/?uri=CELEX:52025DC0440#:~:text=The%20implementation%20of%20the,out%20of%20Russian%20gas%20imports.\">100 billion cubic metres<\/a>\u00a0(more than 3,500 billion cubic feet) of gas by 2030, she added, \u201cthe bloc could satisfy demand without additional gas infrastructure or increased imports.\u201d<\/p>\n<p>IEEFA energy finance analyst Clark Williams-Derry said a \u201creshuffling of deck chairs\u201d might see Germany importing more LNG while the United Kingdom imports less, with the net result that Europe as a whole needs no additional supply. With significant new LNG capacity coming online in the near future, he said the global market will be over-supplied between 2026 and 2036\u2014well past the five- to seven-year delivery target that Hodgson laid out last week\u2014with the peak expected to hit in 2029.<\/p>\n<p>Jaller-Makarewicz said the EU is also operating under\u00a0<a href=\"https:\/\/www.consilium.europa.eu\/en\/policies\/fit-for-55\/\">Fit for 55<\/a>, a set of laws aimed at reducing the continent\u2019s climate pollution by at least 55 per cent by 2030. Some of its key elements include a <a href=\"https:\/\/www.theenergymix.com\/eu-closes-in-on-world-first-carbon-border-adjustment\/\">carbon border adjustment mechanism<\/a>, higher emission reduction targets for\u00a0<a href=\"https:\/\/www.theenergymix.com\/eu-boosts-industrial-emissions-target-from-43-to-62-by-2030\/\">industry<\/a>, and energy savings for\u00a0<a href=\"https:\/\/www.theenergymix.com\/eu-sets-sights-on-energy-savings-for-vulnerable-populations\/\">vulnerable populations<\/a>.<\/p>\n<h2 class=\"wp-block-heading\">A \u2018Climate Wake-Up Call\u2019<\/h2>\n<p>Meanwhile, European decision-makers heard a stark warning in the last week that the\u00a0<a href=\"https:\/\/www.theenergymix.com\/risk-of-dangerous-climate-tipping-points-rises-with-each-0-1c-of-warming-new-analysis-shows\/\">Atlantic Meridional Overturning Circulation<\/a>\u00a0(AMOC) could begin shutting down as early as the 2060s, in what European Climate Commissioner Wopke Hoekstra called a \u201cwake-up call\u201d from researchers at Utrecht University. \u201cShutdown of the AMOC would see temperatures in Europe plummet even as global warming marches on. This would also reduce rainfall and likely bring even drier summers, with devastating consequences for agriculture,\u201d Politico EU\u00a0<a href=\"https:\/\/www.politico.eu\/article\/gulf-stream-could-collapse-lifetime-warn-eu-wopke-hoekstra\/\">reported<\/a>.<\/p>\n<p>\u201cThere\u2019s a sense out there that climate change has taken a backseat because we\u2019re so busy dealing with [other] pressing concerns,\u201d Hoekstra wrote on social media. \u201cSo a big thanks to these scientists for giving us another serious climate wake-up call.\u201d<\/p>\n<h2 class=\"wp-block-heading\">East Coast LNG Vs. West Coast \u2018Swaps\u2019<\/h2>\n<p>Although much of the initial reaction to Carney\u2019s and Hodgson\u2019s European tour focused on the limited prospects for new LNG terminals in Atlantic Canada, discussions in Berlin centred on two other possibilities: treating Churchill, which Carney\u00a0<a href=\"https:\/\/about.bnef.com\/insights\/clean-energy\/europe-is-entering-a-new-phase-of-its-energy-journey\/\">cited<\/a>\u00a0as \u201cessentially a new port\u201d, as an eastbound export terminal for LNG, or having European companies buy up West Coast LNG and trade it on global markets for suppliers that are closer to home.<\/p>\n<p>\u201cMany of the buyers are prepared to buy LNG off the West Coast of Canada and trade those products in the international market for LNG,\u201d Hodgson\u00a0<a href=\"https:\/\/www.msn.com\/en-ca\/news\/canada\/canada-s-lng-draws-german-interest-for-market-swaps-minister-says\/ar-AA1LlgiP\">told<\/a>\u00a0media Berlin.<\/p>\n<p>That line of thought matched up with recent remarks by British Columbia Energy and Climate Solutions Minister Adrian Dix, who told the Globe and Mail he sees his province becoming a leading global supplier of fossil fuels while boosting renewable energy at home.<\/p>\n<p>\u201cAt the centre of the strategy is an investment in wind and solar power that Mr. Dix likened in scale to the dawn of B.C.\u2019s modern hydroelectricity system in the 1960s. He suggested it has the ability to draw capital displaced from the United States amid that country\u2019s anti-renewables turn,\u201d\u00a0<a href=\"https:\/\/www.theglobeandmail.com\/business\/article-bc-renewables-energy-fossil-fuels-adrian-dix-climate\/\">wrote<\/a>\u00a0Globe columnist Adam Radwanski.<\/p>\n<p>\u201cWhile the new capacity would partly enable a climate-friendly shift in energy usage\u2014from gasoline-powered cars to electric vehicles, for example\u2014it\u2019s also meant to power the growth of the province\u2019s LNG industry, as well as new mining activity.\u201d<\/p>\n<p>But \u201cB.C.\u2019s version of Mr. Carney\u2019s grand bargain between resource extraction and sustainability remains tenuous,\u201d Radwanski added. Dix\u2019s \u201coverarching message was that Ottawa\u2019s backing\u2014financial, rhetorical and, in some cases, regulatory\u2014could go a long way toward ensuring investor confidence, as well as\u00a0<a href=\"https:\/\/www.theenergymix.com\/carneys-major-projects-office-sidelines-indigenous-rights-leaders-say-as-ex-trans-mountain-ceo-takes-charge\/\">social licence<\/a>.\u201d<\/p>\n<p>Dix did contrast B.C.\u2019s wish list of nation-building projects with the westbound oil pipeline that has been loudly championed by Alberta Premier Danielle Smith and opposed by the B.C. government. He said B.C.\u2019s top pick, the 450-kilometre North Coast Transmission Line from Prince George to Terrace, would help electrify the province\u2019s gas industry while opening up critical mineral reserves to supply electric vehicle supply chains.<\/p>\n<p>The project is ready to roll, he told Radwanski, and is no less than \u201cthe best national project existing in Canada now.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>This article was published by The Energy Mix on Aug. 30, 2025. By Mitchell Beer The Canadian government will depend on continuing gas demand from Europe and \u201cexploratory discussions\u201d with potential trading partners in Germany <a class=\"mh-excerpt-more\" href=\"https:\/\/energi.media\/news\/lng-export-push-depends-on-future-eu-gas-demand-exploratory-discussions-with-buyers\/\" title=\"LNG export push depends on future EU gas demand, \u2018exploratory discussions\u2019 with buyers\">[Read more]<\/a><\/p>\n<\/div>","protected":false},"author":6,"featured_media":66994,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"give_campaign_id":0,"footnotes":""},"categories":[1],"tags":[13,2929,41,1077,14,2978,224,34,597],"class_list":{"0":"post-66993","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news","8":"tag-canada","9":"tag-carney","10":"tag-energy","11":"tag-eu","12":"tag-featured","13":"tag-hodgson","14":"tag-lng","15":"tag-natural-gas","16":"tag-trade"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - 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