Joint study will inform future LNG trade and investment decisions between the partners.

What: Canada and the EU have taken another step forward in plans to cooperate on LNG and energy security with the partners announcing they will conduct a long-term feasibility study on Canadian LNG exports to Europe.

Why: Europe is set to quit imports of Russian LNG on January 1 and with the US appearing to be an unreliable trade partner amid tariff threats, Brussels is keen to cosy up to Ottawa.

What Next: No timetable has been presented for the study but it will examine European market demand, infrastructure requirements, as well as the commercial viability. 

Canada and the EU have strengthened their strategic partnership and will conduct a joint long-term feasibility study on Canadian LNG exports to Europe, the two partners announced on October 30 at the Canada-EU Alliance for the Future held in Montreal.

The negotiations, which also included talks on EU investment in Canadian critical minerals, pave the way for broader cooperation in the LNG sector.

While the announcement marks a key step forward in the partnership, it fell short of revealing a timeline for the LNG feasibility study.

The feasibility study will assess European market demand, infrastructure requirements, and the commercial viability and will be used to determine future trade and investment decisions on Canadian LNG exports between the partners.

Canadian Prime Minister Mark Carney has been pushing hard for his country to be made an associate member of the EU. The meeting in Montreal concluded with the two partners next planning to meet in March. Meanwhile Carney intends to conclude negotiations at the European Council meetings in June.

NewsBase Horizon, our intelligence and advisory division, views that if the economics can align, a strengthen partnership makes sense for both parties. Canada is actively seeking to decouple from the US amid President Trump’s trade war with the country.

In 2025, Canada sent 96% of its gas exports to the US. And prior to the launch of its flagship facility LNG Canada in July 2025, virtually all of its gas exports went to its southern neighbour.

Meanwhile, the EU has also grown weary of relying on the US as a reliable supplier of energy. Constant tariff threats combined with declarations of annexing Greenland from Denmark have made the EU sour on trading with the US.

Additionally, Europe is in a desperate need to secure more energy supplies from friendly trade partners considering a ban on imports of Russian LNG will come into force on January 1. Moreover, a ban on remaining Russian pipeline gas imports will also come into play on September 30.

The commitment to a feasibility study builds on several commercial arrangements already in place between planned Canadian LNG facilities and European buyers. On October 26, Canada’s proposed Ksi Lisims LNG facility finalised a 20-year LNG supply deal with Germany’s Securing Energy for Europe (SEFE) for 1mn tonnes per year (tpy).

And in August, Ksi Lisims finalised a 20-year deal with Germany utility Uniper (XETRA: UNO) for supply of 2mn tpy with deliveries to begin in 2032. Additionally, French supermajor TotalEnergies (NYSE: TTE) has also inked a 20-year LNG purchase agreement with the project located in British Columbia.

Indeed, European firms appear steadfast in their commitment to Canadian LNG with Uniper even declaring it would be willing to receive super-chilled fuel from Canadian suppliers via the costly and lengthy route through the Panama Canal.

Meanwhile, Canada appears to be all-in on building its burgeoning LNG sector. Both Ksi Lisims and LNG Canada Phase 2 received special federal status under Mark Carney's Major Projects Office. Naturally both projects, along with Cedar LNG and Woodfibre LNG were identified by the federal and provincial governments to have their development accelerated.

Ottawa’s next job is determining what is the least costly way of getting its natural gas from western Canada across the Atlantic Ocean to European buyers. In August, the government completed a feasibility study on an expansion at the Port of Churchill that would include an offshore LNG export terminal. The study put the price tag of the project at between $70 bn to $80 bn.

An export terminal facility in Fermeuse, Newfoundland, would have the shortest shipping distance to Europe. However, the proposed project has yet to gain much momentum and would require the longest pipeline.

Talks have been held about converting Saint John LNG from an import terminal to an export facility, but discussions have not gone very far.

On the other hand, discussions are starting to pick up about plans to build a major LNG project in Quebec. The proposed project at the port of Baie Comeau would include a 15 mn tpy facility. However, it would also require development of an energy corridor to transport natural gas from western Canada to Quebec. 

Indeed, it appears to be only a matter of time before Canadian LNG is exported to Europe. On October 23, Canada and Turkey signed a joint statement to strengthen cooperation in LNG. The question now to be answered is what location in the world’s second largest country would be the ideal spot for shipping cargoes of the super-cooled gas to Europe.