LNG Canada Phase 2 FID on Track for Next Month Amid Global Market Volatility

The Shell-led LNG Canada export venture is reportedly on track to make a final investment decision (FID) for its Phase 2 expansion as early as next month, according to three sources with knowledge of the matter. The expansion would double the project's capacity to 28 million metric tons per annum.

The proposed Phase 2 expansion has gained momentum due to growing concerns over supply security in Asia amid Middle East conflicts and Red Sea shipping interruptions. Tight global markets, production outages at major suppliers, and robust long-term demand growth from nations swapping coal for cleaner-burning natural gas have also fueled interest in new LNG projects.

LNG Canada, a joint venture led by Shell with partners including Malaysia's Petronas, PetroChina, Mitsubishi Corp, and Korea Gas Corp, has secured support from Indigenous communities in the area. MNT Investments LP, representing a coalition of five neighboring First Nations, signed an agreement granting the option to invest up to C$1 billion in the Phase 2 expansion.