Scholz says Germany wants more natural gas from Canada but lacks infrastructure, business backing

German Chancellor Olaf Scholz says he wants Canada to increase its shipments of liquefied natural gas to Europe but admits a lack of infrastructure and an unproven business case for the Canadian export stands in the way of any boost in supply.

Scholz also told CBC News that the war in Ukraine will not end until Russian President Vladimir Putin realizes that his strategy is destined to fail.

"We would really like Canada to export more (liquefied natural gas, LNG) to Europe," Scholz told host Vassy Kapelos on CBC News Network's Power & Politics Tuesday.

"We are creating the atmosphere for very direct talks between the business sectors of Canada and Germany [to see] If there is something which could be done now in this very crisis … but this is part of the follow-up between the businesspeople of the two countries."

WATCH / Scholz talks energy needs on Power & Politics

Scholz said a business case has to be worked out — "because if it's too expensive, it will not fly."

On Monday, Prime Minister Justin Trudeau said that natural gas would have to be shipped by pipeline from the gas fields of Western Canada to a still-unbuilt liquefaction terminal on the Atlantic coast in order to supply Europe.

An undertaking like that would be a costly, Trudeau said, and could prove unprofitable over the long term given Europe's commitment to a rapid transition to a cleaner economy.

"One of the challenges around LNG is the amount of investment required to build infrastructure for that," he said. "There has never been a strong business case because of the distance from the gas fields, because of the need to transport that gas over long distances before liquefaction."

Even if a business case could be worked out, Scholz said, Germany doesn't have the infrastructure to receive Canadian LNG.

"We have not built terminals for importing liquid natural gas to Germany at our own shores in the north," he said.

"This is what we are changing now … We will build ports, at many places, for importing natural gas, liquid natural gas, LNG, and this will really make a difference."

Scholz said that pipeline and terminal infrastructure will come online by January, allowing Germany to start accepting LNG arriving by ship.

Even without direct imports of LNG from Canada, he said, the increased production Canada and the U.S. are sending into the global marketplace is helping to ease the strain on his government.

"Even if these exports are not directly going to Germany or to Europe, it helps because there is a lack of supply," he said.

Scholz says his government is doing its best to stockpile LNG for the colder months ahead, to reduce gas use and to bring coal-fired energy back online to help bridge the country until it can solve its energy problems.

The trouble with turbines

Ukraine has criticized Trudeau and his government for agreeing last month to Germany's request to exempt Siemens Canada from sanctions against Russia so that it could return a turbine for use in the Nord Stream 1 pipeline that supplies natural gas to Germany.

The turbine had been under repairs at Siemens' Montreal facility, the only location in the world capable of maintaining the equipment. Federal ministers have defended the move as necessary to secure gas supplies for Germany.

Scholz told Kapelos that while Ukraine is upset, western countries decided at the outset that they would not impose sanctions that hurt their own economies to a greater degree than they hurt Russia.

"I'm absolutely sure that Ukraine is very much willing not to hurt Germany, or the other European countries, because … the Nord Stream 1 pipeline is not just serving Germany but many European countries," he said.

Canada's permit also allows Siemens to import, repair and return five other turbines used in Nord Stream 1, according to their maintenance schedule.

WATCH / Scholz says Germany and Canada will continue to 'cooperate' on turbines

Kapelos asked Scholz if he has received assurances from Trudeau that those other turbines will be returned.

"I think there is political understanding that we will cooperate, that we are friends and that we will not make it feasible that the Russian game is working," Scholz said.

Scholz also pointed out that while his country disagrees with Ukraine on the turbine issue, it is firm in its political, financial and military support for Ukraine's defence.

Russia cannot dictate terms of peace: Scholz

The chancellor said that Putin's approach to Ukraine is imperialist in nature and motivated by a desire to create a Russian empire. He said Putin's hubris has hampered his goals.

"I'm absolutely convinced that he planned to invade the Ukraine in two or three weeks and to get the whole country," Scholz said.

"He wants to get territory off his neighbours and this is an aggression we never will accept. And so we are giving the support [so] that Putin understands that he will not succeed with this, what he is doing, and the war will end when he understands that this is nothing that works."

Scholz told Kapelos that Putin has never given him any indication that he will come to this realization.

Scholz said that while Putin has offered to participate in talks to end the conflict, he has done so only on the condition that Russia is allowed to dictate the terms of peace — something Germany cannot accept.

"I made it very clear to [Putin] as I make it very clear to the public," he said. "It will not work to have a dictate peace [where] he just takes parts of the territory and then [waits] for a better time to [return]."