Germany's state-owned energy company Uniper is conducting talks with Canadian parties to broaden its liquefied natural gas (LNG) procurement, according to three people familiar with the matter. Sources said these discussions are taking place on both corporate and political levels as part of Berlin's effort to build a wider economic partnership with Canada and to reduce dependence on U.S. energy supplies.
Officials and corporate representatives have linked the talks to Germany's bid for a Canadian submarine procurement tender. Sources told Reuters that the submarine competition is likely to involve related commercial arrangements beyond defense procurement, potentially encompassing rare earths, batteries and energy deals.
Uniper declined to comment on the particulars of the conversations, but a company spokesperson said Uniper is continuously looking to diversify its supply base. The spokesperson added that Canada is attractive as a supplier because of its stable regulatory framework, available gas resources and LNG development prospects.
The discussions reflect ongoing concern in Germany that the country has become overly dependent on the United States for LNG. Last year the United States accounted for 96% of Germany's LNG imports, and Uniper has already signed its first long-term agreement with Canada's Tourmaline. That concentration of supply has become a policy focus as Germany continues to manage the after-effects of an energy shock that followed the cessation of Russian gas deliveries.
Complicating the prospective expansion of Canadian LNG exports to Germany is a shortfall of regasification infrastructure on Canada’s East coast. Sources said this capacity gap could necessitate the construction of new terminals if east coast exports to Europe are to be viable. Currently, Canada's LNG export footprint is concentrated on the west coast, where all current and planned capacity is located. The east coast has limited infrastructure beyond Repsol's Saint John terminal.
Canada has been seeking to diversify its LNG offtake destinations beyond the United States, pursuing buyers in markets such as Japan, India and Malaysia. Within the context of the German bid for the submarine tender, Berlin's economy ministry said there is an expectation that any award would include offset arrangements intended to generate added value in the client country, and that the ministry is supporting such efforts.
Canada's department of natural resources said it was aware of Germany's interest in LNG imports and noted that decisions to move projects into construction and to sell LNG ultimately rest with private sector actors.
The talks between Uniper and Canadian counterparts come amid broader geopolitical strains affecting global energy markets. Sources noted that the U.S.-Israel conflict with Iran has prompted shutdowns of some oil and gas fields in the Middle East, an added source of disruption that has coincided with recent high-level energy diplomacy, including a visit by Germany's Economy Minister to Saudi Arabia intended to expand energy cooperation.
Summary
Uniper's discussions with Canada aim to diversify Germany's LNG supply away from heavy reliance on the United States and are linked to a broader economic engagement connected to a Canadian submarine tender. Key constraints include limited regasification capacity on Canada’s east coast and the private sector's control over project decisions.