LNG Canada Moves Toward Phase 2 Expansion

Partners in the Shell-led LNG Canada joint venture are expected to announce a decision on a Phase 2 expansion of the Kitimat, British Columbia terminal. Sources familiar with the matter say the announcement could come as early as October, with the venture aiming to double export capacity to roughly 28 million tonnes per year. The decision will be subject to each partner satisfying its own commercial, fiscal, regulatory and governance requirements before a collective green light is possible.

LNG Canada joint venture could approve Phase 2 capacity-doubling expansion by early October The Globe and Mail (Toronto)

LNG Canada’s Phase 1, a $29 billion USD project, began exports to Asia in 2025 after shipping its first cargo last year. The joint venture is led by Shell, which holds a 40 percent stake, followed by Malaysia’s state-owned Petronas (25 percent), Japan’s Mitsubishi Corp (15 percent), China’s PetroChina (15 percent) and South Korea’s KOGAS (5 percent). In September, U.S.-based MidOcean Energy acquired a 20 percent interest in Petronas’s Canadian assets, including its share in LNG Canada. The venture also plans to expand the Coastal GasLink pipeline, operated by TC Energy, which has faced notable Indigenous opposition.

The Globe and Mail (Toronto)LNG Canada joint venture could approve Phase 2 capacity-doubling expansion by early October

The proposed Phase 2 would add 14 million metric tons per annum of liquefaction capacity, effectively doubling the Kitimat facility’s output. The Major Projects Office lists the expansion as a fast-track candidate and estimates it could attract about $33 billion in private investment to Canada. An Indigenous investment vehicle, MNT Investments LP, representing five First Nations, has secured an option to invest up to $735 million USD in Phase 2, marking one of the largest Indigenous stakes in a Canadian energy project.

LNG Canada joint venture could approve Phase 2 capacity-doubling expansion by early October

LNG Canada spokesperson Paul Hagel noted that joint-venture partners continue their own assurance processes for a potential Phase 2 decision. The spokesperson for Natural Resources Minister Tim Hodgson declined to comment on the timing. Both Prime Minister Mark Carney and Minister Hodgson are scheduled to be in Kitimat for the announcement, underscoring the federal government’s support for expanding Canada’s LNG export capacity.

The Globe and Mail (Toronto)

The expansion aligns with growing Asian demand for secure LNG supplies, especially as European markets seek alternatives following Russia’s invasion of Ukraine. By increasing capacity at Kitimat—a location that offers shorter shipping routes to Asia than U.S. Gulf-Coast terminals—Canada aims to strengthen its role as a reliable global LNG supplier and diversify its energy export markets beyond the United States.

LNG Canada joint venture could approve Phase 2 capacity-doubling expansion by early October