Latvia would welcome shipments of Canadian LNG to help Europe reduce its dependence on Russian gas in the aftermath of Moscow’s invasion of Ukraine, says the Baltic state’s new ambassador to Canada.
Kaspars Ozolins said there is a proposal in the works to build a liquefied natural gas import terminal near the Baltic Sea port of Skulte, Latvia, and that his country would encourage Canadian investors.
“We are trying to build a resilient energy system,” Mr. Ozolins said in an interview. “If Canada is going to invest in LNG, we would wholeheartedly support it.”
The Latvian LNG project, still on the drawing board, is part of the Three Seas Initiative that brings together 12 European Union member states with coastal presence on the Baltic, Black or Adriatic seas to build better interconnected infrastructure.
Latvia is currently the location of Canada’s biggest military deployment. A Canadian commander leads a multinational battlegroup in the country, set up in 2017 as part of NATO’s “Enhanced Forward Presence” effort to deter Russian aggression and expansionism. This includes more than 540 Canadian soldiers, a number that will rise to nearly 700 within a few weeks as Canada boosts its presence in Latvia.
Canada has the natural gas, but can’t get LNG to Europe
Prime Minister Justin Trudeau is visiting Latvia this week and Canada is expected at some point extend its deployment near the capital of Riga beyond 2023.
Mr. Ozolins said, however, that it’s clear to him that NATO will have to transform its enhanced presence into enhanced defences. Riga is looking for funding from NATO member countries for anti-missile systems to protect Latvia from Russia, one of the topics under discussion when U.S. Secretary of State Antony Blinken visited the capital Monday.
The Latvian ambassador said Russian President Vladimir Putin’s unprovoked military assault on Ukraine has wrecked the rules-based international order.
“That has been shattered severely,” he said, adding it’s hard to predict the state of international relations after Russia’s attack on a European country.
But what European countries know for sure is they cannot depend on Russian natural gas any longer. With its abundant gas reserves, the proximity of its oil fields and an extensive existing pipeline network, Russia dominates the European Union’s gas market, supplying about 38 per cent of its needs. During the gas crises of 2006 and 2009, disputes between Russia and Ukraine, mostly over pricing, saw supplies cut to Ukraine with the effects immediately rippling through Europe.
Last month, on the first day of Russia’s full invasion of Ukraine, Latvia made the decision to buy more natural gas and ordered state-owned energy company Latvenergo to purchase a quantity that is being moved to the country’s underground storage in Vidzeme. Latvia has underground storage capacity to hold more than 4.7 billion cubic metres of natural gas, Mr. Ozolins said. That’s equivalent to about two years of natural gas consumption for the country’s 1.9-million people.
Mr. Ozolins said Latvia’s reliance on Russian natural gas is currently seasonal: It’s used in winter months for heating and electricity generation. He said in the future, Latvia could also “buy LNG from Canada and store it underground and pump it out in the wintertime.”
Mr. Ozolins said what will also drive demand for more natural gas is Germany’s decision to shut down its nuclear power plants by the end of 2022 and phase out coal power by as early as 2030.
“There will be a need for more gas and the market is there,” he said.
Germany on Saturday took further steps to cut reliance on Russian energy supplies by unveiling plans for a terminal to import LNG. German state lender KfW has signed a memorandum of understanding with the country’s top power producer RWE and Dutch network operator Gasunie to build the terminal in the port town of Brunsbuettel.
Alberta Premier Jason Kenney has championed Canadian petroleum to help reduce Europe’s dependency on Russian natural gas. Mr. Kenney’s office said Monday it would support any export proposals to replace Russian energy.
“Alberta welcomes this common sense proposal to displace the energy that’s funding Putin’s war machine, and we look forward to offering our support for any proposals that come forward, and we sincerely hope that the federal government will echo that support for Canada’s energy,” said Christine Myatt, a spokesperson for the Premier.
But LNG export proposals in Canada continue to face hurdles, including the lack of pipeline access to coastal waters and the challenges of finding ways for projects to be economically viable when planning infrastructure to transport natural gas and turning it into liquid form.
After years of false starts by would-be developers hoping to export LNG from Canada, it’s unclear how many plants could get built in the next half decade. Only one Canadian export project, Shell PLC-led LNG Canada in Kitimat, B.C., is under construction.
Conservative foreign affairs critic Michael Chong decried Canada’s inability to find foreign markets for its natural gas.
“Canada is the fifth largest natural gas producer in the world – but we can’t get our natural gas to tidewater to assist our European allies,” he said.
Canada and Latvia have significant business ties. Air Baltic, the Latvian air carrier, has purchased dozens of aircraft made by Montreal-based Bombardier. And Circle K convenience stories throughout Latvia are owned by Alimentation Couche-Tard, based in Laval, Que.
With files from Brent Jang in Vancouver and Reuters
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Steven Chase