Shell Approves LNG Canada Phase 2 to Double Export Capacity
LNG Canada Approves Phase 2, Doubling Export Capacity
LNG Canada partners have approved the second phase of the Kitimat export project in British Columbia, clearing a major expansion that will double LNG production capacity from 14 million to approximately 28 million tonnes per year.
What Readers Should Know
- LNG Canada partners have taken a final investment decision on Phase 2.
- The expansion will add two LNG processing trains and approximately 14 million tonnes per year of capacity.
- Total LNG Canada capacity will increase to roughly 28 million tonnes per year.
- Shell owns 40% of the project and expects nearly 6 million tonnes per year of additional LNG from Phase 2.
- Commercial operations are targeted for the early 2030s.
- Shell expects global LNG demand to rise about 65% by 2050 from 2025 levels.
MONTREAL (Oil Monster): Shell and its LNG Canada partners have taken a final investment decision on the second phase of the LNG Canada export project in Kitimat, British Columbia, approving a major expansion that will double the facility's production capacity.
Phase 2 will add approximately 14 million tonnes per year of LNG capacity, increasing total production capability from 14 million tonnes per annum to roughly 28 million tonnes per annum.
Phase 2 Adds Two LNG Processing Trains
The expansion will add two additional LNG processing trains to the two trains already operating at the Kitimat facility.
Phase 2 also includes additional infrastructure such as an LNG storage tank, condensate storage, another loading berth and expanded processing and utility systems.
Commercial operations from the expansion are targeted for the early 2030s.
The first phase of LNG Canada began exporting LNG in June 2025, making the facility Canada's first large-scale LNG export terminal.
Shell to Receive Nearly 6 Million Tonnes of Additional LNG
Shell holds a 40% interest in LNG Canada and is the largest participant in the joint venture.
The company expects to receive nearly 6 million tonnes per year of additional LNG from the Phase 2 expansion.
The other LNG Canada partners are Malaysia's PETRONAS, PetroChina, Japan's Mitsubishi Corporation and Korea Gas Corporation.
Shell has described LNG Canada as an important part of its integrated gas portfolio because of the facility's access to Canadian natural gas resources and its Pacific Coast location.
Expansion Strengthens Canada's Pacific LNG Export Capacity
The Kitimat location provides direct access to Asian LNG markets from Canada's west coast.
Shell has previously highlighted the shorter shipping distance from British Columbia to major Asian markets compared with LNG cargoes originating from the U.S. Gulf Coast.
The Canadian government has also identified LNG Canada Phase 2 as a priority project because of its potential to expand Canadian energy exports and diversify the country's international trading relationships.
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Phase 2 Expands Shell's Canadian Gas Position
The investment also builds on Shell's broader natural gas position in Western Canada.
Shell completed its acquisition of ARC Resources in September 2026, adding substantial natural gas and liquids production in British Columbia and Alberta.
Shell had previously identified LNG Canada Phase 2 as an opportunity to connect additional Western Canadian gas production with international LNG markets.
Shell Sees Long-Term Growth in LNG Demand
The Phase 2 decision comes as Shell continues to forecast significant long-term growth in global LNG consumption.
Shell's LNG Outlook 2026 projects global LNG demand at nearly 700 million tonnes per year by 2050, approximately 65% higher than the 422 million tonnes traded globally in 2025.
The company expects South and Southeast Asia to account for a significant share of future LNG import growth as energy consumption rises and importing countries seek flexible and reliable gas supplies.
Shell has also said additional liquefaction investment will be required during the 2030s and 2040s to meet projected demand.
LNG Canada Capacity to Reach About 28 Mtpa
Once Phase 2 enters commercial operation, LNG Canada's four processing trains will have combined production capacity of approximately 28 million tonnes per year.
The expansion represents another major increase in Canada's LNG export capability following the start-up of the first two trains in 2025.
For Shell, the project will add nearly 6 million tonnes per year of LNG to its equity supply and provide another source of LNG for its global trading and marketing portfolio.