Key Highlights

  • Ksi Lisims LNG has signed a 20-year Heads of Agreement with Australia’s Santos for 1 million tonnes of LNG per year.
  • It is the project’s third international offtake agreement in 2026.
  • The proposed project has planned export capacity of 12 million tonnes per annum.
  • The federal government is using the project as part of its strategy to diversify Canadian energy exports beyond the United States.
  • Ksi Lisims LNG is a proposed C$30 billion project involving the Nisga’a Nation.
  • The project is designed to use hydroelectric power and is expected to have substantially lower emissions than the global LNG average. 

Why Is Ksi Lisims LNG Back in Focus in September 2026?

Canada’s LNG strategy has received another boost after Ksi Lisims LNG signed a long-term Supply agreement with Australia’s Santos.

Under the agreement announced September 14, Santos would purchase 1 million tonnes per annum of LNG for up to 20 years from the proposed British Columbia project. The arrangement is currently a Heads of Agreement and remains subject to definitive sales and purchase documentation and other conditions.

The agreement represents the third international commercial arrangement secured by Ksi Lisims LNG this year, following agreements involving European buyers.

For Ottawa, the development is important because it provides another example of Canadian Natural Gas potentially reaching international customers rather than remaining overwhelmingly dependent on the US market.

How Does the Santos Agreement Support Canada’s Trade Diversification Strategy?

Canada historically sent almost all of its natural gas exports to the United States.

The federal government is now targeting a major shift in that pattern, with an objective of increasing the share of Canadian natural gas exports going to non-US markets to an estimated 55% by the early-to-mid 2030s.

Ksi Lisims LNG is one of the projects being positioned to support that diversification.

The Santos agreement is particularly relevant because Santos has an established presence across the Asia-Pacific energy market. Canadian LNG delivered from British Columbia could therefore provide access to customers in Asian markets while giving Canada another export destination outside North America.

What Is the Ksi Lisims LNG Project?

Ksi Lisims LNG is a proposed floating LNG Facility on the north coast of British Columbia, with the Nisga’a Nation as a key partner.

The project is designed for capacity of up to 12 million tonnes of LNG per year and has an estimated development cost of approximately C$30 billion.

If constructed, it would become Canada’s second-largest LNG facility.

The project has already moved through significant regulatory stages. It received federal and provincial environmental approvals in 2025 and was subsequently referred to Canada’s Major Projects Office.

Why Is Indigenous Partnership Important to the Project?

The Nisga’a Nation is a key partner in Ksi Lisims LNG, giving the project an important Indigenous economic-participation component.

The federal government has increasingly emphasized Indigenous participation in major infrastructure and natural-resource projects as part of its broader approach to economic development.

Ksi Lisims therefore represents more than an LNG export project. It is also being presented as an example of how Indigenous participation, private capital, provincial cooperation and federal infrastructure policy can be combined around a major Canadian resource development.

Could Ksi Lisims Help Canada Expand LNG Exports to Asia?

British Columbia’s Pacific location provides Canadian LNG projects with direct access to the Pacific Basin.

That geographic position can be important for Canadian producers seeking customers in Asia because LNG can be shipped westward from the Canadian coast rather than transported south into the established US export network.

Santos’ involvement adds significance because the company operates extensively across the Asia-Pacific region.

The agreement does not guarantee that all future capacity will be sold into specific Asian markets, but it provides another international commercial relationship for the proposed facility.

What Other LNG Deals Has Ksi Lisims Secured?

The Santos agreement follows other long-term commercial arrangements.

Ksi Lisims has secured agreements involving Germany’s SEFE and Uniper, expanding its potential customer base into European markets. The Uniper agreement announced in July covers 2 million tonnes per annum for up to 20 years, with initial deliveries expected from 2032.

Western LNG has also stated that agreements with Shell, TotalEnergies and Uniper account for 6 million tonnes per annum of planned capacity, while the Santos agreement adds another 1 million tonnes per annum under its current commercialisation programme.

The accumulation of agreements is therefore an important step toward commercialising the project's targeted 12 million tonnes per year.

Could Infrastructure Become the Next Major Test for Canadian LNG?

Securing buyers is only one part of developing a large LNG project.

Infrastructure, financing, permitting, pipeline capacity and electricity supply will all influence whether proposed projects progress from commercial agreements to construction and eventual production.

The North Coast Transmission Line is particularly relevant to Ksi Lisims because the infrastructure is intended to expand clean electricity availability in northwest British Columbia and support major industrial projects, including LNG and critical-mineral developments.

This means the success of Canada's LNG strategy is increasingly connected with wider infrastructure development.

Why Is LNG Important for Canada’s Economic Strategy?

The federal government is positioning LNG as part of a broader strategy focused on exports, investment, energy security and economic diversification.

International LNG contracts can potentially provide long-term Demand for Canadian natural gas while supporting infrastructure Investment and employment.

They can also strengthen Canada’s ability to supply energy to international partners.

At the same time, large LNG developments require substantial capital, infrastructure and long-term market commitments, meaning commercial agreements are milestones rather than final investment decisions.

What Should Businesses and Investors Watch Next?

The next major milestones for Ksi Lisims LNG include completion of definitive commercial agreements, further capacity commitments, financing arrangements and the project's final investment decision.

The Santos agreement is currently a Heads of Agreement, so its eventual conversion into a binding sales and purchase agreement will be an important development.

Progress on supporting infrastructure will also remain closely watched.

For Canada's wider energy strategy, the key question is whether projects such as Ksi Lisims can help transform the country from a predominantly US-oriented natural gas exporter into a more diversified global LNG supplier.

What Does the New LNG Deal Mean for Canada in 2026?

The Santos agreement gives Ksi Lisims LNG another international customer and strengthens the commercial foundation of one of Canada’s largest proposed LNG developments.

For Ottawa, the project fits directly into the government's strategy of expanding Canadian energy exports, attracting international investment and reducing dependence on a single export market.

The September 2026 agreement is therefore significant not simply because of the additional LNG volume, but because it represents another step in Canada’s attempt to establish a broader global market for its natural resources.