Ksi Lisims lands third LNG supply deal, but a much bigger test lies ahead

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeEnergyOil & GasKsi Lisims lands third LNG supply deal, but a much bigger test lies aheadAnalysts say Canada remains well short of the ambitious scale Ottawa is aiming forLast updated 59 minutes ago A rendering of the proposed Ksi Lisims LNG project in northern British Columbia. Photo by Ksi Lisims LNGThe backers of a massive LNG shipping terminal proposed for the B.C. coast signed their third supply deal of the year, with Australia’s Santos Ltd. agreeing to buy close to 10 per cent of Ksi Lisims’ capacity over 20 years.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountAlthough significant, analysts suggest a deal like this is not enough to achieve the federal government’s ambitious, long-term goal of becoming the world’s third-biggest LNG exporter.Still, the deal is the latest sign that Canada’s nascent LNG sector is starting to find real footing in global markets, following earlier Ksi Lisims agreements with Germany’s Uniper SE and SEFE Gmbh.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againWhat’s more, it landed on the same week as Canada’s first international Investment Summit in Toronto, Prime Minister Mark Carney’s bid to attract billions of dollars’ worth of foreign investment.“Ksi Lisims LNG’s third international deal being signed the same week shows that it is our moment – if we choose to seize it,” Tim Hodgson, Canada’s minister of energy and natural resources, said in a statement.Ksi Lisims, a $30-billion floating LNG facility proposed for the north coast of B.C., in partnership with the Nisga’a Nation, would become the country’s second-largest LNG terminal after LNG Canada.“The level of interest we are seeing from leading global energy companies like Santos reflects a growing global role for reliable, low carbon Canadian LNG,” added Davis Thames in the same statement. Thames is the founder and chief executive of Western LNG, Ksi Lisims’ lead developer and future operator.Taken together, the deals reflect a broader shift in Canada’s trade posture.As recently as 2024, less than one per cent of the country’s natural gas exports went to markets outside the United States. Ottawa now aims to send roughly half of Canada’s natural gas exports to non-U.S. buyers over the next 10 years.In an evolving energy market landscape, Hodgson said foreign demand for Canadian exports will only grow. “Projects like this demonstrate how Canada can be a leading energy superpower for years to come,” he said.But new analysis from S&P Global Energy suggests that even with deals like Ksi Lisims’ progressing, Canada remains well short of the scale the federal government is trying to attain for exported LNG.S&P Global expects Canadian LNG terminals will produce close to 36 million tonnes of the fuel every year by 2035. That’s roughly double the capacity of the country’s only operating terminal, LNG Canada’s, which took 16 years to bring online.Ottawa’s stated goal, however, is to churn out 100 million tonnes a year, which would make Canada the world’s third-largest LNG exporter.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.“It’s an incredibly aggressive goal. Technically achievable, but it would require an alignment of policy we haven’t seen in a long time,” said Kevin Birn, S&P Global’s chief analyst for Canadian energy markets.Closing that gap, S&P Global’s analysts argue, would require production investment in Canada at a pace and scale unlike anything the industry has previously undertaken.“We’re blessed with the geology and the geography to enable this,” added Birn. “But to realize that (goal), you have to realize all of the associated upstream infrastructure that goes with it. There has to be a plan that’s inclusive of everything.”The firm points to policy clarity, stable investment conditions, supply-chain readiness and Indigenous consultation as key variables determining whether Canada gets there or not.“Canada has a massive advantage,” said Birn. “We’re stable, and we’re proximate to key demand regions. But the world won’t wait for Canada any longer.”The competitive backdrop Birn refers to is what adds urgency.S&P Global projects international LNG demand of roughly 176 million tonnes a year of new supply capacity by 2050. The firm also estimates that some 600-million annual tonnes of output from competing projects in places like Argentina, Alaska and Qatar are chasing that same opportunity.“Canada’s ultimate share of that market opportunity will come down to speed and conviction,” said Birn. “We’re asking investors for billions of dollars and to wait five years or more before they see a return. They need to know the rules will be the same the whole way through.”Birn suggests that if Canada doesn’t hit the government’s goal by 2050, the lost prize will be more than just the 100 number alone. “It’s everything that comes with it: thousands of miles of pipe and export terminals for LNG and oil. It’s much more than the sum of its parts.”Natural Resources Canada, meanwhile, frames deals like the Ksi Lisims-Santos agreement as evidence the country’s trade diversification strategy is working. The defining question, though, is whether Canada can close the gap between what analysts expect and what Ottawa wants.“This is about taking a fledgling industry and making it the third largest in the world,” Birn said.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.