Prime Minister Justin Trudeau attends a bilateral meeting with Greece's Prime Minister Kyriakos Mitsotakis in Montreal, on March 24.Christinne Muschi/The Canadian Press
Rachel Ziemba is founder of Ziemba Insights and adjunct senior fellow at the Center for a New American Security.
On the occasion of his visit to Canada this week, Greek Prime Minister Kyriakos Mitsotakis expressed his interest in partnering with Canada on LNG, the latest developed market ally to do so. Canadian officials had little to say publicly about the Greek interest.
While Greece itself is a small market, and one that has been rapidly adding to its domestic renewable power capacity – on some days renewables power its whole grid – it’s also positioning itself as an energy hub and reseller, including in LNG. This is the kind of model Canada might want to follow; forging such partnerships could provide access to parts of the world where demand may continue to increase.
While Canada has no LNG export facilities ready and cannot immediately deliver, Greece had followed Germany and Japan in seeking Canadian LNG, and it won’t be the last to do so.
By not treating these requests seriously, Canada risks missing an opportunity to deliver what the market is looking for: a reliable LNG supplier that keeps total lifecycle emissions as low as possible.
That aim is behind Canadian projects, including LNG Canada and Driftwood LNG, which are slated to come online in the next few years and plan to use hydroelectricity to power its turbines and thus reduce the fossil fuel footprint of producing this resource. They have also signed up to methane-reduction targets to avoid wasting fuel and the projects that are closest to beginning operations have ownership stakes held by Indigenous communities.
The world is set to continue to use LNG in the coming decades as it looks to phase out coal. Emerging market growth continues to rise. Keeping Canadian natural gas in the ground will not stop the world from using LNG – it would only limit Canada’s opportunity to benefit and to help set the rules on making LNG transition-friendly.
As environmentalists argue, long-term demand (post-2050) is expected to decline, but it appears there will be plenty of it in the coming decades. While European demand for LNG is likely to stagnate like its economy, there is still demand for LNG as part of the power mix, and European buyers are wary of relying only on any one supplier.
Power demand is rising elsewhere. In fact, 2023 was one of the first years it did so in the United States, owing to data centre use as well as battery and chip foundry construction. This presents an opportunity for Canada, if there is a realistic timeframe and process for projects coming to market.
If Canada and allies do not seize the opportunity, then they will be ceding the market primarily to Qatar, which recently announced plans to expand its capacity significantly. Qatar has some of the lowest production costs, and government backing as a state-run energy company, but allowing it to dominate the sector could increase vulnerabilities for future energy supply.
LNG demand from Asian allies such as Japan and South Korea remains, and newer buyers such as India are entering the market for long-term LNG purchases as they look to displace coal and respond to growing power demand. Canada could have a role to play here in producing LNG that adheres to environmental regulation.
The U.S. pause on LNG export capacity provides an opening for other players, including Canada. While many projects in the U.S. already have export permits, some projects will need to get extensions in the coming years, meaning more production may be at least temporarily kept in the ground.
Having a national discussion about the economic and environmental cost of LNG is key, but should not be a stalling tactic in the development of the sector. The Canadian government should clarify a pathway to make sure that large energy infrastructure projects can be built.