Greek PM fuels debate for expanding Canadian LNG as Ottawa promotes renewable energy industry

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The Prime Minister of Greece is pitching his country as a major European market for Canadian liquefied natural gas, despite Ottawa’s preference for promoting renewable energy and continuing challenges to viably bring export facilities to fruition.

Kyriakos Mitsotakis is making the first visit by a Greek prime minister to Canada in four decades. He told CTV Question Period in an interview aired Sunday that his country is “very interested in obtaining LNG at competitive prices” that it could ship to Eastern European markets, including Ukraine, and that Canada would be an ideal supplier.

“As fast as we go in terms of our renewal penetration, we will still need a reliable source of electricity,” as Greece lacks nuclear power and is “practically completely moving away from coal,” he said. “That leaves LNG for the foreseeable future as a significant source of energy for the production of energy.”

Mr. Mitsotakis’s two-day trip featured bilateral talks with Prime Minister Justin Trudeau and a signing ceremony Sunday, as Greece bought seven DHC-515 water bombers made by Calgary’s De Havilland Aircraft of Canada to help fight wildfires.

Close to 300,000 people of Greek origin live in Canada, and the two countries have a modest trading relationship: Canadian imports from Greece last year amounted to $404.4-million, more than twice its $180.6-million in exports to the southern European country.

Greece is the latest country, after Germany and Japan, to express interest in buying LNG from Canada. Despite an abundance of natural gas here, the product is mostly used domestically or shipped to the United States, and many proposed projects to liquefy it domestically and ship overseas have stalled or died.

That includes two proposed projects in the Maritimes, which could have served European markets, sponsored by Repsol SA of Spain and Calgary’s Pieridae Energy Ltd. Both were cancelled last year over concerns about their economic viability, including expensive tolls to bring in gas from the West, and fierce environmental opposition to such projects.

Questions have swirled for years around the economic sense of building LNG facilities here. While European leaders have said more LNG would help reduce dependence on fossil fuels from Russia, critics have argued they would prolong global reliance on fossil fuels – or become “stranded” assets if countries succeed in reducing oil and gas use.

There are still several LNG projects in development. The first, a Shell PLC-led facility in Kitimat, B.C., is slated to start shipping next year. By contrast, there are seven LNG export terminals operating in the U.S. and five more likely to open by 2028, although U.S. President Joe Biden paused granting new export permits in January.

The Canadian government has been cool to the LNG sector. Mr. Trudeau and Energy Minister Jonathan Wilkinson have questioned the business case for East Coast LNG terminals, and instead pushed projects that deliver cleaner sources of energy.

Asked about the Greek Prime Minister’s statements, Carolyn Svonkin, a spokesperson for Mr. Wilkinson, replied that “if LNG is to play any role in the future, it must be pursued in a manner that is aligned with Canada’s and the world’s climate commitments” to reach net-zero by 2050. That will require cutting methane emissions associated with extraction, electrifying LNG facilities and ensuring “LNG shipping abroad is only displacing higher-emitting energy sources like coal.”

She highlighted the government’s investments in renewable energy and clean technologies, including a deal signed by Mr. Wilkinson last week to provide German market access to Canada’s hydrogen industry. Ms. Svonkin added that any investment decisions on LNG would have to comply with federal and provincial regulations and would come as “global demand for oil and gas will peak this decade and begin to decline.”

Shell foresees a 50-per-cent increase in global demand for LNG by 2040, driven by Asian markets. Conservative Leader Pierre Poilievre has argued Canada needs to fast-track permitting for LNG facilities as part of his climate plan that includes axing federal carbon pricing. He has called LNG export operations “environmentally friendly and strategically important” given natural gas could replace dirtier coal in places such as India.

“Let’s sell our gas,” he told a rally in Ottawa Sunday. “When I’m prime minister, we’re going to grant fast permits for LNG, we’re going to put it on a ship to Asia to displace dirty Asian coal, we’re going to put it on a ship to Europe to break European dependence on Putin and turn dollars for dictators into paycheques for our people.”

Mr. Mitsotakis is visiting Canada at a time when Greece continues it rebound from its 2010 financial crisis. Rating agencies Standard & Poor’s, Fitch Ratings, DBRS Morningstar and Scope Ratings have recently upgraded its credit rating to investment grade, while Moody’s upgraded its junk status rating on Greece by two notches in September.

There are sticking points in the trading relationship between Canada and Greece over one of the latter’s key largest exports: feta cheese. Greece still hasn’t ratified the 2017 Canada-European Union Comprehensive Economic and Trade Agreement, or CETA, which France’s Senate last week voted to reject over concerns by its farmers about unfair competition.

The European Parliament approved the trade deal seven years ago after excluding Greek feta from the list of protected designations of origin, which would limit the use of the word, “feta,” to only describing the brined cheese made from sheep’s or goat’s milk made in Greece. Canadian cheese producers, including Saputo Inc. and Tre Stelle maker Arla Foods Inc., sell Canadian-made products marketed as “feta” and made from cow’s milk.

Mr. Mitsotakis told CTV that Greece still has some issues with CETA, including protecting its right to use the word, “feta,” exclusively in its products.

“We want to make sure that feta cheese when it is sold in Canada is the actual feta cheese and only Greece technically has the right to produce feta cheese,” he said. “Once these issues are going to be sorted out, we’ll be very, very happy” to ratify the deal.