Germany wants to shift from Russian to Canadian natural gas supplies at 'warp speed,' but developing LNG export capacity could take years

German Finance Minister Olaf Scholz holds a news conference on tax revenues in Berlin, Germany, October 30, 2019. REUTERS/Fabrizio Bensch
German finance minister Scholz holds news conference on tax revenues, in BerlinReuters
  • Germany wants to move away from Russian natural gas at "warp speed," the German chancellor said Tuesday.

  • Although Canada has said a partnership with would be doable, researchers doubt extra supplies will come from Canada soon enough.

  • Canada currently doesn't have export capacity, and developing that could take years, a report says.

Germany is looking to lean on Canada as it becomes less reliant on Russian natural gas, according to recent comments from German chancellor Olaf Scholz — but the transition could be difficult, as Canada currently lacks the capacity to export LNG, and developing it could take years, researchers say.

"As Germany is moving away from Russian energy at warp speed, Canada is our partner of choice," Scholz said at a conference on Tuesday, shortly after Canada's Prime Minister had said exporting LNG to Germany would be "doable."

That would open a window for Germany to stop relying on Russian fuel – and possibly prevent a major energy crisis from hitting the nation this winter.

Prior to the invasion of Ukraine, Russia supplied 32% of Germany's LNG consumption, according to Reuters, meaning it's been one of the nations to suffer the most as Europe gets cut off from Russian energy supplies.

But researchers doubt extra supplies from Canada will come soon enough. Canada doesn't have the infrastructure to export LNG overseas, and is currently building two terminals on its west coast. But it will take at least three years to finish the first terminal, a report from the International Institute for Sustainable Development said – and by then, EU think tanks believe Europe will already have gone off Russian fuel.

"Despite recent requests to support the immediate needs of Germany, Canadian LNG infrastructure cannot be scaled up in time to meet Europe's short-term needs," the report said, adding that it would be more realistic to turn to countries like Norway.

However, a source told Reuters that Scholz was "well aware of the sort of timeline that would be associated" with new Canadian infrastructure, and Germany was "quite keen for gas just about anywhere," given the current supply rut.

Since the onset of Russian sanctions, Canada has said it has the capacity to produce an extra 200,000 barrels of oil and 100,000 barrels of natural gas per day. Since it doesn't have infrastructure to export overseas, the vast majority of that fuel is being purchased by the US, which has become the world's top LNG supplier.

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