Key facts
- LNG Canada plans to double its export capacity to 28 million tonnes per year.
- Commercial operations for the expansion are anticipated in the early 2030s.
- The expansion is driven by a need for supply diversification due to disruptions in the Strait of Hormuz.
- The Strait of Hormuz crisis has made approximately 20% of global LNG supply interruptible.
- Buyers are seeking LNG from Canada, Mozambique, Indonesia, Papua New Guinea, and Argentina.
- China is in talks to secure long-term LNG supplies from exporters not reliant on the Strait of Hormuz.
LNG Canada is set to double its liquefied natural gas export capacity to 28 million tonnes per year, with the expansion expected to begin commercial operations in the early 2030s. This move is part of a broader global effort to diversify LNG supply sources, driven by ongoing disruptions in the Strait of Hormuz.
The crisis in the Strait of Hormuz, a critical chokepoint for global energy trade, has rendered approximately 20% of global LNG supply interruptible. This has led buyers in Europe and Asia to seek alternative supplies from regions like Canada, Mozambique, Indonesia, Papua New Guinea, and Argentina, moving away from routes dependent on the Persian Gulf.
Analysts at Wood Mackenzie noted that the increased value of reliable supply is a significant consequence of the current situation, prompting buyers to reassess their contracting strategies. China, a major LNG customer of Qatar, is reportedly in discussions to secure long-term supplies from exporters not reliant on the Strait of Hormuz, aiming to reduce its exposure to Gulf deliveries.
Beyond diversifying supply sources, energy importers are also looking to diversify among fuels, delivery entry points, and contract structures. The Western Hemisphere, particularly Canada and Mexico, is gaining prominence as a stable source of LNG with direct access to Asian markets without transiting chokepoints. Thailand is also accelerating its renewable energy buildout, launching a 10-gigawatt solar power scheme to reduce its reliance on gas imports.