The headquarters of German utility company Uniper SE in Duesseldorf on March 10, 2020.THILO SCHMUELGEN/Reuters
The German utility company Uniper SE says a 20-year supply contract with Canada‘s Goldboro LNG for liquefied natural gas deliveries originally planned to start in 2025 “no longer plays a significant role“ in its plans – more evidence that Canadian LNG exports will not be on the table in Germany‘s short-term quest for energy security.
Uniper spokesperson Lucas Wintgens said the Goldboro project in Nova Scotia – one of two proposed LNG export facilities on Canada’s East Coast – has remained in the planning stage, but has not been financed by Goldboro’s owner, Pieridae Energy Ltd., for the past year. “Our LNG supply contract with Goldboro for five million tonnes [a year] of LNG is still in place, but against this background it no longer plays a significant role in Uniper’s plans,” Mr. Wintgens said.
The actual status of the supply contract has not previously been reported by Pieridae or Uniper. Pieridae spokesperson Sophie Schneider said her company “has adjusted its strategy to one of focusing on building the upstream side of the business. There are no updates on the option of an Eastern Canada-based LNG project, including the contract with Uniper, at this time.”
The German Federal Ministry of Economics told The Globe and Mail this week that short-term LNG exports will not be under discussion during Chancellor Olaf Scholz’s visit to Canada next week. Even if approved and implemented quickly, LNG shipments from Canada would not reach Germany within the next two years, since terminal construction needs at least five years, according to the German gas association Future Gas.
Germany will not discuss rapid expansion of LNG exports during visit to Canada
Mr. Scholz’s trip is part of the German government‘s efforts to become less dependent on Russian gas and mineral supplies by deepening energy and raw materials partnerships with other countries.
Prime Minister Justin Trudeau said Friday there‘s not much Canada can do to help Germany get through the coming winter, and the focus during Chancellor Scholz‘s visit next week will be on a longer-term “pivot“ away from oil and gas.
“Investing in hydrogen, investing in critical minerals, investing in different approaches like reinvesting in nuclear – these are things that are going to get us to where we need to be and these are things that we‘re looking at on a broad scale and working closely with partners like Germany,“ Mr. Trudeau said.
In addition, Natural Resources Minister Jonathan Wilkinson told The Globe Friday he doesn‘t want to “oversell the LNG opportunity” on Canada’s East Coast.
“What Canada‘s contribution with respect to LNG can for sure do more fulsomely is get [the Shell PLC-led LNG Canada project in Kitimat, B.C.] on stream, which is five times the size of the plans we‘re talking about on the East Coast,” Mr. Wilkinson said.
Mr. Wilkinson plans to talk about the economic prospects of LNG export terminals with German Economics Minister Robert Habeck and proponents in Canada at some point in the future. “Ultimately we’d like to get to a point relatively quickly as to whether or not the economics of this project are sufficiently robust that it makes sense to spend a lot more time on,” Mr. Wilkinson said.
The Saint John LNG terminal in New Brunswick, owned by Spain’s Repsol SA, is also proposing to export LNG from Canada’s East Coast. Mr. Wilkinson told The Globe in July the New Brunswick and Nova Scotia projects will both need to move forward without federal financing.
In principle, Canadian LNG supplies such as those from the proposed Goldboro facility in Nova Scotia would be of great interest to Uniper. “This is not least because Canada has a short transport distance to the Northwest European market compared to other supplier countries,“ Uniper’s Mr. Wintgens said.
Germany’s Uniper is among the companies most affected by Russia‘s invasion of Ukraine. The utility reported a loss of more than €12.4-billion in the first six months of this year. Slightly more than half of this, €6.5-billion, was related to the expected future impact of restricted gas supply from Russia. The proposed Nord Stream 2 gas pipeline, in which Uniper has a significant stake, was not commissioned, which created further losses.
On Friday, the Russian gas company Gazprom announced a three-day shutdown of the entire Nord Stream 1 gas pipeline starting at the end of August. Owing to “a series of routine maintenance works,“ no gas will flow to Germany from Aug. 31 to Sept. 2, the company said. Gas deliveries from Russia have already been sharply reduced to 20 per cent of capacity since June.
During the three days, the only functioning turbine at the Portovaya compressor station in Russia has to be checked and overhauled, Gazprom said. This is to be done in co-operation with specialists from Siemens Energy AG. Siemens had no comment on Gazprom‘s announcement when asked, the German News Agency reported.
With a file from Adam Radwanski
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