French oil giant TotalEnergies returns significantly to Canada with bet on burgeoning LNG industry

TotalEnergies has entered into a pre-purchase agreement with the group proposing a floating LNG export terminal north of Prince Rupert. Photo by INA FASSBENDER /AFP via Getty Images

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French oil major TotalEnergies SE has secured a toehold in Canada’s emerging liquefied natural gas industry, signing long-term agreements with the proponents of Ksi Lisims LNG, a proposed export terminal on the northwest coast of British Columbia.

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The deal announced Monday would see TotalEnergies purchase two million tonnes per annum (Mtpa) of liquefied natural gas (LNG) from the Nisga’a Nation-backed project over a period of 20 years. It marks the second major offtake, or pre-purchase, agreement for the floating LNG terminal on Pearse Island, north of Prince Rupert, which signed a similar deal with global energy giant Shell in 2023.

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Locking in long-term buyers for its natural gas exports, scheduled to begin in 2029, is critical if project backers Western LNG, Rockies LNG and the Nisga’a Nation are to give the project the green light, with a final investment decision (FID) expected later this year.

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Under the agreements, TotalEnergies is also acquiring a five per cent stake in project developer, shareholder and future operator Western LNG, with the option of increasing that stake or taking a direct ownership share in the Ksi Lisims project of up to 10 per cent.

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“TotalEnergies is the largest purchaser of North American LNG, and one of the largest producers and portfolio players in the world,” Davis Thames, president and chief executive of Western LNG said in a statement. “Their experience with development and operations will be a welcome addition to the project as we move steadily toward FID later this year so that we can provide reliable, low-carbon Canadian LNG to growing global markets.”

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The announcement also marks a significant return by TotalEnergies to Canada’s oil and gas sector after its high-profile exit from the oilsands in 2023; at the time, the company said it was divesting its oilsands interests in order to focus on plays with lower breakeven points, in a move that was hailed by some analysts as a positive given increased investor interest in lower carbon energy.

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Ksi Lisims will have a total export capacity of about 12 Mtpa or 1.58 billion cubic feet per day (Bcf/d) once complete and is planned to be fully electrified, powered through a tie-in to BC Hydro’s planned North Coast transmission line. 

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“TotalEnergies shares our vision of bringing cleaner energy to the world, advancing Indigenous leadership in the global economy and sharing our deep commitment to environmental stewardship,” Eva Clayton, president of Nisga’a Lisims government said in a statement.

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The project is currently under review by the B.C. Environmental Assessment Office.

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However, the environmental review is not the only hurdle for Ksi Lisims. B.C. Environment Minister Tamara Davidson is soon expected to make a key determination on a related regulatory matter over the Prince Rupert Gas Transmission (PRGT) project, the pipeline that will supply feed gas to the Ksi Lisims LNG export terminal.

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While PRGT received its initial environmental permits in 2014, it was required to have been “substantially started” by November 2024 in order to maintain its environmental certificate. The project’s proponents, the Nisga’a Nation and Western LNG, say construction started in August 2024, but those claims have been challenged by some Indigenous and environmental opponents who say the activities were limited and don’t meet the threshold for a substantial start.