European buyers, including Germany's Uniper, are in discussions to purchase liquefied natural gas (LNG) from Canada's west coast and transport it through the Panama Canal, according to an April 15 media report. This initiative is part of their long-term strategy to diversify supply sources, an effort that has gained urgency due to the Iran conflict.

The negotiations are centered around the Ksi Lisims LNG project in Canada. Three informed sources revealed that European buyers are among the potential customers engaged in commercial talks for this project. The proposed LNG export terminal is moving toward finalizing contracts with buyers, with a final investment decision expected later this year.

European interest in the project is notable because Canada's emerging LNG export industry is geographically better suited to supply Asian markets. Shipping through the Panama Canal would incur additional toll costs and longer transit times. All of Canada's existing and planned LNG export capacity is located on the west coast, offering shorter shipping routes to Asia, while the east coast lacks significant infrastructure beyond Repsol's Saint John terminal.

The lack of infrastructure has long been seen as a barrier to supplying large volumes of Canadian LNG to Europe. However, a source familiar with the Ksi Lisims project stated that the current Middle East conflict is prompting European buyers to consider accepting the higher costs and longer transit times associated with Panama Canal shipments. This would allow them to diversify their supply sources to stable, democratic jurisdictions like Canada.

"Since the start of the Iran conflict, there has been particularly strong interest from global LNG buyers, including those in Europe, in securing offtake from Ksi Lisims," the source said.

Uniper declined to comment. A Reuters report in March indicated that the German company is negotiating with Canadian corporate and political entities to expand its LNG procurement. Last year, the United States supplied 96% of Germany's LNG imports. Two sources noted that Ksi Lisims is viewed as having potential for supply diversification.

The Ksi Lisims project is not an immediate solution for Europe's energy needs. Even if its backers—Houston-based Western LNG, the Canadian gas producer consortium Rockies LNG, and the project's landowner, the Nisga'a Nation—decide to proceed, construction will take several years.

Nevertheless, the Canadian government has referred the project to a major projects office for accelerated regulatory review. Prime Minister Mark Carney has been seeking to expedite permits for natural resource projects to bolster an economy facing threats from U.S. trade policies.

Shell and TotalEnergies have already signed 20-year LNG purchase agreements with Ksi Lisims.

Tourmaline Oil, a partner in Rockies LNG, sees the project's prospects improving. Vice President Jamie Heard stated that the Iran conflict and the resulting closure of the Strait of Hormuz have increased the likelihood of the Ksi Lisims project moving forward. He noted that natural gas prices in Western Canada continue to trade below U.S. benchmarks, providing a strong commercial rationale for Canadian LNG.

"The economic logic is there; with this level of price spread, these projects can pay back their costs fairly quickly," Heard said in an interview.

Tourmaline has previously signed an eight-year gas supply agreement with Uniper. The deal, set to begin at the end of 2028, involves supplying 80,000 MMBtu per day, priced against the TTF benchmark.

The move holds geopolitical significance. Canada's Minister of Energy and Natural Resources stated in August 2025 that German companies were seeking to purchase and swap Canadian LNG cargoes. Sources now indicate that these companies are also interested in taking physical delivery of Canadian product.

This development signals that Europe is accelerating its shift away from reliance on U.S. and Middle Eastern energy supplies toward more diversified sources. Canada, with its stable political environment and abundant natural gas resources, is poised to become a key component of Europe's energy security strategy.