As the world moves away from fossil fuels, providing clean hydrogen to Germany and the rest of Europe is a greater prospect for Canada than attempting to develop liquefied natural gas (LNG) facilities, said Canada’s natural resources minister.
In advance of German Chancellor Olaf Scholz’s visit to Canada the following week, Canada and Germany are talking about constructing LNG facilities on the Canadian Atlantic coast over the next five years. Germany has been working to reduce its reliance on Russian gas ever since that country invaded Ukraine in February.
However, it would be expensive to ship gas from Alberta on Canada’s west to the east coast. The terminal’s lifetime would be too short to be economical unless transformed into a hydrogen terminal when gas demand drops due to the need for a new pipeline and the worldwide transition away from fossil fuels.
“We are resolving those problems. However, I would point out that the major possibility on the East Coast is hydrogen “Jonathan Wilkinson, the minister of natural resources.
Wilkinson’s remarks reveal a change from highlighting the challenges to endorsing potential new East Coast LNG projects. A German minister stated on Thursday that Canadian LNG would only be “a medium-term answer.”
During a two-day visit the following week, Scholz will sign an agreement to build hydrogen supply networks with Canada. His entourage, which includes German business leaders, will visit Stephenville, Newfoundland, Toronto, and Montreal.
According to Wilkinson, the deal would quicken the development of a collaboration to establish hydrogen exports from the East Coast as early as 2025.
The best uses for hydrogen as a zero-carbon fuel are for heating, driving heavy machinery, and operating massive industrial processes.
On Friday, Canadian Prime Minister Justin Trudeau told reporters that rather than discussing Germany’s current energy requirements, his talks with Scholz will focus “much more on where we need to be on the path to net zero, and the fact that Canada can and will position itself as a significant energy supplier in a net-zero world.”
Canada’s environment minister, Steven Guilbeault, told Reuters in June that Repsol’s plant in New Brunswick was the most viable project. In recent months, Germany and Canada have suggested they were exploring alternatives for LNG facilities on the East Coast.
Given the length of the transmission required, “the economics of west coast LNG are almost definitely likely to be better than east coast LNG,” Wilkinson added.
On the Pacific coast, Canada has two LNG projects planned: Woodfibre LNG, a subsidiary of Pacific Energy Ltd., is anticipated to be finished in 2027, while Shell-led LNG Canada is scheduled to start operations in 2025.
According to Wilkinson, future Canadian LNG projects should have a plan to convert LNG to hydrogen in order to prevent stranded assets in light of the worldwide movement toward renewable energy.
Critical minerals for electric-vehicle batteries will also be discussed during the German delegation’s visit as businesses “actively” look to ensure supply through partnerships or investments, the official added.
Herbert Diess, the CEO of Volkswagen, would be among those going, Reuters was informed by individuals with knowledge of the situation. BMW and Mercedes-Benz Group AG will also send representatives, according to Wilkinson.