LNG Canada moves ahead with Phase 2 expansion at B.C. terminal

Shell PLC SHEL-N -1.51% and its partners in the LNG Canada project on the B.C.

coast have agreed to proceed with a $30-billion-plus expansion of the facility that will double its output of liquefied ...

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terminal LNG Canada moves ahead with Phase 2 expansion at B.C.

terminal Jeffrey Jones Calgary Published September 29, 2026 Open this photo in gallery: A liquefied natural gas tanker fills up at the LNG Canada facility in Kitimat, B.C., last year.

Partners in LNG Canada will spend at least $30-billion to double production at the facility.

ETHAN CAIRNS/The Canadian Press Shell PLC SHEL-N and its partners in the LNG Canada project are banking on decades of rising demand for liquefied natural gas as they proceed with a more than $30-billion expansion of the facility on the B.C.

Wars in Iran and Ukraine have disrupted global gas supplies and driven up prices, but the decision to double the capacity of the plant in Kitimat, B.C., is predicated on a longer-term transition away from more carbon-intensive fossil fuels, LNG Canada chief executive Chris Cooper said on Tuesday.

“You may argue that there’s some uncertainty right now, but if you look at that long-term demand profile and then the long-term outlook, we think we’ll invest through that cycle,” Mr.

“So that element’s there – generating cash flow for decades.

That’s the way we look at these projects.” Shell said LNG Canada Phase 2, which got the green light from its partners on Tuesday, is one of many such plants that will be required in the coming decades.

The company said it expects global LNG demand to increase 65 per cent to nearly 700 million tonnes a year by 2050.

Cooper said some estimates are even higher.

A big risk is going over budget on construction, so LNG Canada’s decision to double up on equipment that has been in operation since last year helps lessen that, he said.

The partners have already spent $100-million in preparation for Phase 2.

“So you have a really good risk profile on project execution – known location, known partners, known contracts, a known scope in terms of replication, and then a known market with five big institutional investors who fully support us,” he said.

Prime Minister Mark Carney speaks after LNG Canada said it will go ahead with the Phase 2 expansion project at its LNG terminal in Kitimat, B.C., during an announcement in Vancouver, on Tuesday, Sept.

The expansion will double LNG Canada's capacity to 28 million tonnes a year.

THE CANADIAN PRESS/Darryl Dyck DARRYL DYCK/The Canadian Press The investment in the facility will increase production to 28 million tonnes of LNG per year, making it one of the largest such export facilities in the world, the partners said.

Prime Minister Mark Carney has championed increasing energy shipments to diversified global markets to reduce the country’s reliance on the United States, which buys the lion’s share of Canada’s oil and gas exports.

Projects such as LNG Canada Phase 2 and Alberta’s West Coast oil pipeline proposal are both aimed at bolstering the Canadian economy against U.S.

Meanwhile, with Russia’s invasion of Ukraine and shipping disruptions through the Strait of Hormuz , energy security has come into sharp focus for current and would-be buyers of Canadian oil and gas in Asia and Europe.

“Today’s investment is being made in a different environment.

A more dangerous and divided world, a world where Canada fully values export diversification and the greater sovereignty it confers.

A world where speed, reliability and predictability are major competitive advantages,” Mr.

LNG Canada Phase 2 is among several West Coast projects moving forward, under construction or planned, including Cedar LNG, Woodfibre LNG and Ksi Lisims LNG.

The LNG Canada expansion was among the early projects referred to the Major Projects Office a year ago to be considered for fast-track approval.

The project includes adding two processing trains at the facility in Kitimat, along with new storage and condensate tanks, a new loading berth and expanded utility and process systems.