Briefing · Energy

LNG Canada doubles down: Phase 2 takes export capacity to 28 mtpa

A final investment decision on the Kitimat expansion commits Canada to a much larger role in Pacific LNG trade.

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LNG Canada and its partners have taken a final investment decision on Phase 2 of the Kitimat export project in British Columbia, a major expansion that will double nameplate production capacity from 14 million tonnes per annum to 28 mtpa.

The joint venture comprises Shell, PETRONAS, PetroChina, Mitsubishi Corporation and KOGAS. LNG Canada said the expansion will add two liquefaction trains. Shell, which holds a 40% interest, said it expects nearly 6 mtpa of additional LNG from Phase 2.

The Canadian government described the expansion as a C$33 billion private-sector investment. The project sits on the traditional territory of the Haisla Nation and connects western Canadian gas resources to an ice-free Pacific port, giving cargoes a direct route to Asian markets.

The decision matters because the next LNG cycle is increasingly about portfolio depth and destination flexibility. New North American supply is arriving into a market where Asian demand, European security requirements and changing domestic gas balances can pull cargoes in different directions.

It also raises the familiar infrastructure questions around upstream supply, pipeline capacity, construction execution and emissions. Coastal GasLink will need additional capability as LNG Canada expands. The project therefore represents more than two extra trains: it is a system-level bet on Canadian gas production and Pacific LNG demand.

For Canada, Phase 2 is also an export-diversification project. The country has historically sent most of its energy exports south to the United States. Kitimat creates a large westbound outlet and ties Canadian gas economics more directly to international LNG markets.

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