Canada's LNG draws German interest for market swaps, minister says

By Amanda Stephenson and David Ljunggren

CALGARY (Reuters) -German companies are looking to buy and swap Canadian LNG cargoes shipped off the Pacific coast to help meet European demand, Canada's Energy and Natural Resources Minister Tim Hodgson said on Wednesday.

Canada, the world's fifth-largest natural gas producer, shipped its first-ever liquefied natural gas export cargo in June from the recently constructed LNG Canada facility in British Columbia, which is led by Shell and is the first North American LNG export site with direct access to the Pacific Ocean. 

The bulk of LNG Canada's exports is expected to ship to Asia, but Hodgson told reporters the cargoes are also drawing interest from European buyers pursuing swap opportunities.

"Many of the buyers are prepared to buy LNG off the West Coast of Canada and trade those products in the international market for LNG," Hodgson said at a press conference in Berlin.

Canadian Prime Minister Mark Carney said on Tuesday that Canada will discuss ways to provide LNG to Germany. 

Canada has no LNG export facilities proposed with direct access to the Atlantic Ocean, and any such project would face significant costs and take years to build.

But the Carney government's tone is a marked departure from that of former Prime Minister Justin Trudeau, who said there was little business case for Canada to export LNG to Europe. Trudeau cited the cost and difficulties associated with building the pipeline infrastructure required to get the gas from Western Canada to the East Coast.

(Reporting by David Ljunggren in Ottawa and Amanda Stephenson in CalgaryEditing by Rod Nickel)