Sources: Uniper talks LNG with Canada to reduce US dependence

Three 'people who are familiar with the matter' said that Uniper, a state-owned German energy company, is in 'talks' with Canada about expanding liquefied gas purchases. This is part of Berlin’s plans to establish a broad economic relationship and reduce reliance on U.S. suppliers. Sources say that the discussions are on a political and corporate level. They are also taking place as Germany prepares to bid for a Canadian sub tender, which is likely going to include deals in rare earths and batteries, and energy.

Uniper refused to comment on any specific talks. However, it did say that Canada's stable regulatory environment, its gas resources, and LNG prospects made Canada an attractive option. These talks reflect concerns that Germany could become too dependent on US energy supplies as it continues to struggle with an energy crisis which has hit Europe's largest economy since former gas supplier Russia stopped delivering. The U.S. and Israel war against Iran also forced some oil and natural gas fields to close in the Middle East. This was just weeks after Germany’s Economy Minister visited Saudi Arabia, with the goal of expanding energy co-operation.

U.S. SUPPLIES THE MOST LNG Last year, the United States supplied 96% of Germany’s LNG imports. Uniper also signed a long-term deal with Canada’s Tourmaline.

According to the people, the lack of capacity for regasification on Canada's East coast could be a major obstacle in the negotiations and require terminals to be built there.

Canada's LNG industry is heavily skewed to the west where all of its current and future export?capacity is situated, while the east coast is virtually devoid of infrastructure, except for Repsol's Saint John Terminal. Canada is looking for alternative buyers to reduce its dependence on the United States. These include Japan, India, and Malaysia.

The German economy ministry stated that it expected any submarine award to generate added value for the client as part of an 'offset agreement', and said they supported such efforts.

The Canadian Department of Natural Resources said that it was aware of Germany’s interest in LNG imports. It added that the decision to move projects from construction to LNG sales is up to private companies. (Reporting and editing by Nina Chestney and Kirby Donovan; Additional reporting by Amanda Stephenson, Christoph Steitz; Marwa Rashad).

(source: Reuters)