LNG Canada Expansion Approved, Doubling Export Capacity by Early 2030s

Shareholders in the LNG Canada project have given the green light to its second phase, which will double the export capacity of the terminal in Kitimat on Canada's West Coast. According to Shell, once complete, the expansion will bring total capacity to 28 million metric tons per year. The new phase is slated to begin commercial service in the early 2030s.

The cost of Phase 2 has been pegged at roughly $23 billion by Ottawa, with Shell holding a 40% stake in the joint venture. Other partners include Petroliam Nasional Bhd, PetroChina Co., Mitsubishi Corp., and Korea Gas Corp., which owns 5% and plans to invest about $1.26 billion.

Asia's biggest LNG buyers are staring at their most severe supply shock in recent memory due to the conflict involving Iran and the near shutdown of the Strait of Hormuz, prompting them to secure cargoes beyond the Middle East and boosting suppliers from the US to Nigeria.

CANADA'S WEST COAST LOCATION gives LNG Canada a shorter path to Asia's biggest LNG buyers without transiting major shipping chokepoints. Prime Minister Mark Carney has said Canada is well positioned to help meet demand, and last year he placed the LNG expansion proposal among 'nation-building' developments.