LNG Canada Chooses Chinese Steel for $33B Expansion Project

The $33 billion LNG Canada expansion project in Kitimat, B.C. will use Chinese steel for its major modules, despite Canadian primary producers facing pressure from U.S. tariffs and import competition.

The decision was made by the LNG Canada joint venture, which includes Shell (40%), PETRONAS (25%), PetroChina (15%), Mitsubishi (15%), and KOGAS (5%). The project's Phase 2 expansion will add two liquefaction trains, storage, and a loading berth, doubling nameplate capacity from 14 to 28 million tonnes per year.

Prime Minister Mark Carney has said that the choice of steel supplier is up to the project owners, but emphasized that there will be opportunities for Canadian suppliers to participate. However, the joint venture has opted to source large modules from China Offshore Oil Engineering Co. (COOEC), a unit of state-owned CNOOC.

This decision comes as Canadian mills are struggling with the loss of their main export market in the United States due to U.S. Section 232 tariffs on steel, which reached 50% in 2025. The Bank of Canada's April 2026 Monetary Policy Report noted that steel exports have fallen by about half.

The LNG Canada project is expected to create up to 4,000 jobs at the Kitimat site during peak construction, but only 90 full-time roles and 150 contractor positions are anticipated once the expansion is complete in the early 2030s.