Ukraine’s largest gas producer and importer Naftogaz Ukrainy has given fresh hope to the backers of Canada’s stalled Energie Saguenay liquefied natural gas project after signing a memorandum of understanding with developer GNL Quebec’s parent company Symbio International.

The project was unveiled in 2014, with the aim of exporting 10.5 million tonnes per annum of LNG to Europe, but failed to gain provincial or national approvals.

The new MoU signed sets out plans for Naftogas to begin off-taking LNG from 2027, and outlines plan for the supply of green liquid hydrogen via Symbio Infrastructure, a Quebec-based partnership that invests in net zero energy infrastructure projects.

The MoU calls for LNG to be supplied to Ukraine via an import regasification terminal in Europe, from where it would reach Ukraine by pipeline.

A GNL Quebec spokesperson told Upstream that the project“clearly demonstrates that our innovative project remains environmentally and commercially necessary”.

“The current situation in Europe has exacerbated an already very present need for energy diversification on the continent towards reliable and low-carbon energy sources as proposed by GNL Quebec,” the spokesperson said, describing the Energie Saguenay project as "carbon neutral".

According to industry analysts, Poland offers best options as it already operates an LNG terminal at Swinoujscie, with work is underway to upgrade the terminal’s capacity. Poland has been supplied with Russian gas via the Ukraine pipeline system for decades, and flows can be reversed.

Poland is also adding another import facility at the Baltic port of Gdansk that is scheduled to be operational by the time the first volumes will be supplied to Nafogaz.

“We salute the Canadian government’s hand towards our European allies to provide responsible LNG with the lowest carbon footprint in the world. At a time when global coal consumption is reaching historic highs, Canada and Quebec can and must be part of the solution," the spokesperson added.

Political uproar

While the MoU gave the Energie Saguenay project a boost, the development still faces opposition in Quebec.

When suggestions of the MoU came to light last week during Naftogaz chairman Yuri Vitrenko’s visit to Washington, DC in the US, Canadian news outlet La Presse quoted Manon Masse, a spokesperson for the province’s leading opposition party Quebec solidaire as saying: “We have just passed a bill to get Quebec out of hydrocarbons. What don’t the promoters of GNL Quebec understand in the word "No’?”.

Sylvain Gaudreault, a spokesperson for another regional opposition party, Parti Quebecois — Jonquiere, was quoted as saying: “The conflict in Ukraine, although unfortunate and reprehensible, remains a situational event that must not deviate us from a trajectory towards carbon neutrality.”

A key element in the proposed LNG project is a 780-kilometre pipeline that will carry gas from Western Canada across Ontario for liquefaction at Saguenay.

According to Canadian broadcaster CBC, the operator of the proposed pipeline, Gazoduq, has to submit environmental impact studies to the Impact Assessment Agency of Canada by mid July 2023.