Germany's Scholz to sign hydrogen deal on Canada trip, discuss LNG

(Reuters) - Germany's Chancellor Olaf Scholz will sign a deal to establish hydrogen supply chains with Canada during his two-day visit to the country next week, officials said, as Berlin accelerates its green transition to reduce dependence on Russian gas supplies.

With fears that Russia could completely shut down already heavily reduced gas flows in retaliation for Western sanctions following its invasion of Ukraine, Scholz will also discuss the prospects for Canadian liquefied natural gas (LNG) deliveries to Germany, the German officials said on Thursday.

However, they cautioned this would not offer a solution for this winter when Germany is facing a possible gas shortage, nor next, as the infrastructure is not yet in place.

Along with Economy Minister Robert Habeck and with a large business delegation in tow, Scholz heads to Canada on Sunday evening on his first official trip to the country, with a packed itinerary taking him to Montreal, Toronto and the small, remote windswept town of Stephenville in the eastern island of Newfoundland.

While Scholz hopes to deepen economic cooperation with Canada, the war in Ukraine will be among other topics under discussion.

Top of the agenda is an agreement on hydrogen the chancellor will sign with Canadian Prime Minister Justin Trudeau in Stephenville, where there are plans to build a plant that will use wind energy to produce the fuel for export, the officials said.

"Energy from Canada represents more of a medium-tern solution," one of the officials said.

The business delegation will include executives from the energy, environment, chemical, automobile, shipping and mining sectors, the officials said. Volkswagen CEO Herbert Diess will be among those travelling, people familiar with the matter told Reuters.

Talks on Monday will focus on cooperation in the energy sector and Scholz will also visit the Institute for Learning Algorithms to learn more about the development of artificial intelligence.

Separately, the chancellor is set to meet with representatives of Canadian pension funds to discuss possible investments in Germany linked to its green transition, the officials said.

On Tuesday Scholz will deliver a speech at the German-Canadian economy conference in Toronto, a gathering focused on energy security, future technologies and automation, before the delegation heads to Stephenville and flies back to Germany overnight.

The officials said they could not determine the last time a German chancellor had made an official visit to Canada without stopping elsewhere, underscoring the importance of this trip.

(Reporting by Sarah Marsh and Andreas Rinke, Additional Reporting by Jan Schwartz and Steve Scherer; editing by Rachel More, Kirsten Donovan)

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