EU and Canada explore LNG deal as Europe grapples with gas crisis

The EU and Canada propose a feasibility study on long-term liquefied natural gas exports to Europe. It would test whether Canadian gas could strengthen European energy security while supporting Canadian economic development. The study would also consider whether such exports fit both sides’ climate objectives.

The draft statement links LNG with wider energy cooperation. This includes electricity grids, battery storage, and physical and cyber protection for energy infrastructure. It also refers to investment and offtake arrangements, meaning agreements for buyers to purchase future supplies. These details matter because a supply deal needs dependable buyers, financing, transport and receiving facilities.

The proposal is still exploratory. The draft does not say how much Canada could supply, what the gas would cost, or which infrastructure would be required. Those unanswered questions will determine whether Canadian LNG can compete with other suppliers and whether long-term gas projects support or hinder Europe’s climate goals.

Liquefied natural gas, or LNG, is natural gas cooled to an extremely low temperature until it becomes a liquid. In liquid form, it takes up far less space than gas, so it can be loaded onto specially designed ships and moved between continents. At its destination, it is warmed back into gas for use.

That transport method matters because gas networks are usually tied to particular producing and consuming regions. LNG can reach markets that are not connected by pipelines. In this case, Canadian producers could potentially ship gas to European receiving terminals, rather than relying on a direct continental pipeline.

The article focuses on the possible EU-Canada study, not LNG’s technical details. It confirms that new LNG terminals and pipelines would require major investment and could operate for decades. The feasibility study would therefore need to test shipping, terminals, costs, supply volumes and climate effects before any long-term expansion.

The article does not quantify how much LNG Canada could realistically send to Europe. It also provides no figure for Europe’s overall gas demand. That means the proposed Canadian contribution cannot yet be expressed as a percentage of European consumption. The draft itself leaves supply capacity as a central unanswered question.

One indication of possible scale is Prime Minister Mark Carney’s support for plans that could double LNG export capacity on Canada’s west coast. He has also signalled openness to gas exports from New Brunswick if the province lifts its fracking ban and develops domestic production. These are possibilities, not confirmed deliveries to Europe.

Canada would also face competition for its LNG. Asian markets are potential destinations, and Europe already receives major supplies from the United States. A feasibility study would need to compare Canadian production, shipping routes, infrastructure, prices and competing buyers. Until those facts are established, claims about Canada’s share of European gas demand would be speculative.

Europe has been trying to replace Russian gas because Russia’s full-scale invasion of Ukraine exposed the strategic risks of relying on Russian fossil fuels. Brussels is seeking more diverse supplies while facing wider geopolitical tensions. The goal is greater energy security and less dependence on a supplier linked to that vulnerability.

Since the invasion, the United States has become the EU’s largest LNG supplier. American shipments replaced much of the cheaper gas previously imported from Russia. Qatar has also been an important potential source, but continuing disruptions in Qatari production and shipping have dented the EU’s supply security. These shifts show that replacing one supplier does not remove every risk.

The EU is now exploring Canada as another possible source, while also dealing with an unpredictable US administration. More suppliers could reduce strategic exposure, but gas would still compete globally. Canada must weigh European demand against Asian markets, and Europe must weigh new imports against its climate ambitions and energy transition.

Moving Canadian LNG to European consumers would require a connected chain of infrastructure. Canada would need facilities to produce and liquefy gas, export terminals and shipping arrangements. Europe would need receiving terminals and links into its gas network. Pipelines would connect production and terminals on both sides, while supporting systems would handle storage and distribution.

The article does not identify specific sites, routes or projects for this EU-Canada proposal. It does say that new LNG terminals and pipelines require substantial investment. The draft also calls for closer cooperation on electricity grids, battery storage, and the physical and cyber protection of energy infrastructure. Those areas would support broader energy security, but they are not presented as a completed LNG network.

The feasibility study is intended to examine whether the required investment and offtake arrangements make sense. Cost, capacity and delivery infrastructure remain unresolved. Any build-out could operate for decades, making its economic usefulness and climate impact important decisions for both sides.

Expanded Canadian LNG exports could improve Europe’s energy security by adding supply from a politically stable producer. More sources could reduce dependence on Russian fossil fuels and make disruptions from individual suppliers less damaging. That is especially relevant while Europe faces low storage levels, soaring gas prices and geopolitical uncertainty.

The mechanism is diversification. Canadian gas could compete with supplies from the United States and Qatar, while Asian markets would compete for Canadian cargoes. If Canadian projects offered reliable volumes and attractive prices, European buyers could gain another option. If production, shipping or infrastructure were expensive, the effect could be smaller. The article provides no forecast for prices or export volumes.

Canada’s expansion could therefore strengthen supply resilience, but it would not guarantee cheaper gas or eliminate dependence on other suppliers. Europe would still need to manage global competition and infrastructure costs. It would also face a choice between securing more gas and accelerating renewables-based electrification and energy efficiency.

Long-lived LNG terminals and pipelines can shape energy choices long after construction. Because they require substantial investment and may operate for decades, owners and governments may want to keep them supplied and earning money. That can make continued gas consumption more attractive, even as Europe tries to reduce fossil-fuel use.

The key mechanism is investment lock-in. Capital directed toward terminals, pipelines and related systems may be unavailable for electrification, renewable energy or efficiency. If demand later falls, the infrastructure could become stranded assets. Environmental campaigners also warn that expanded supply can influence importing countries’ choices, making gas appear easier than investing in alternatives.

Esther Bollendorff of Climate Action Network Europe called the proposed feasibility study a dangerous distraction. She warned of higher bills, stranded assets and weaker climate goals. The article presents this as a central tension: Canadian LNG could improve short-term supply security, but long-term infrastructure might slow Europe’s transition away from fossil fuels.