Key facts
- LNG Canada's Phase 2 expansion could add 14 million metric tons per annum of LNG export capacity.
- The expansion would double the project's total capacity to 28 million metric tons per annum.
- The project's first phase cost approximately C$40 billion.
- MNT Investments LP, representing five First Nations, has an option to invest up to C$1 billion in the expansion.
Partners in the Shell-led LNG Canada export project are nearing a decision on a C$40 billion Phase 2 expansion, with sources indicating a final investment decision could be made as early as October. The proposed expansion would add 14 million metric tons per annum (mtpa) of liquefied natural gas export capacity, doubling the facility's total capacity to 28 mtpa.
The project's first phase, which cost approximately C$40 billion, is designed to produce 14 mtpa from two processing trains and shipped its first cargo earlier this year. LNG Canada is Canada's first large-scale LNG export terminal and is situated on the Pacific Coast, offering shorter shipping routes to key Asian markets compared to U.S. Gulf Coast exporters.
This potential expansion comes amid heightened demand for supply security from Asian buyers due to conflict in the Middle East, Red Sea shipping disruptions, and uncertainty surrounding future flows through the Strait of Hormuz. Tight global markets, production outages, and strong demand for natural gas as a cleaner alternative to coal are also driving interest in new LNG projects.
Shell stated that the company is working with venture partners to explore pathways for the expansion, considering factors like competitiveness, affordability, government support, and stakeholder needs. LNG Canada confirmed that any final investment decision is subject to joint venture participants satisfying their requirements, with a decision hoped for before the end of the year. The expansion also includes a significant investment opportunity for Indigenous communities, with MNT Investments LP, representing a coalition of five First Nations, having an option to invest up to C$1 billion.