LNG

Shell – and its partners PETRONAS, PetroChina, Mitsubishi and KOGAS – have taken a final investment decision (FID) on the second phase of LNG Canada, approving a C$33 billion expansion that will double the British Columbia export terminal’s production capacity to 28 mtpa.

The project will add two liquefaction trains at the Kitimat facility, raising total capacity from 14 mtpa. Commercial operations are expected to begin in the early 2030s, Shell announced today.

FID on the second phase of LNG Canada marks a major expansion of the country’s LNG industry, with the Shell-led project being the country’s first large-scale LNG export project – positioned on the Pacific coast to supply customers in Asia.

Shell owns 40% of LNG Canada and expects to receive nearly 6 mtpa of additional LNG from Phase 2. The other partners are Malaysia’s Petronas, with a 25% stake; PetroChina, with 15%; Japan’s Mitsubishi Corporation, with 15%; and Korea Gas Corporation, with 5%.

Project partners’ approval comes as LNG producers and buyers prepare for a period of strong growth in global liquefaction capacity. New projects in North America and elsewhere are expected to add substantial supply during the late 2020s and early 2030s.

LNG Canada’s first phase comprises two trains with combined capacity of 14 mtpa. The facility began operations in 2025 and has since shipped more than 100 cargoes. Phase 2 will use existing infrastructure and site layouts designed to accommodate the additional trains. The expansion will include an additional LNG storage tank, a condensate tank and loading berth, as well as expanded utility and process systems.

To secure a stable flow of feedgas, LNG Canada partners also agreed to work with Coastal GasLink to expand the existing 670-kilometre pipeline through the addition of five compressor stations.

Shipments from Canada’s LNG Canada plant surpassed 1 million metric tons in April, marking a new monthly record, according to LSEG data, as the $40‑billion facility is ramping toward its full design capacity. All cargoes set sail to Asia, mainly South Korea.

Private capital from Asian exploration and production (E&P) investor are flocking to the North American market in search for LNG-linked assets. Deal flow is shaped by a ‘merger of equals’ as consolidation among Canada’s Montney shale producers accelerates, and Asian buyers seek to get their hands on shale and LNG-linked assets in the US.

Mitsubishi has disclosed it will buy Aethon Energy's assets in the Haynesville Shale – a move that positions the Japanese company to capitalise on burgeoning LNG exports from the US Gulf Coast. The transaction includes $5.2 billion in equity and $2.33 billion in assumed debt.

Japan’s new Prime Minister, Sanae Takaichi, has rebuked demands from US President Donald Trump for an outright ban of Russian LNG, saying such a move would be “difficult.” Mitsui and Mitsubishi own stakes in the Sakhalin-2 project and Russian LNG currently cover some 9% of Japan’s total imports.

The price of building gas-fired power plants in the US has risen to $2,200–$2,500 per kilowatt of capacity, raising doubt about projects economics and freeing up more feedgas for LNG exports. At the Energy Finance Conference in San Diego, panellists warned that building a modern combined-cycle gas power plant now requires hundreds of millions in upfront investment – notably $25 million deposits to secure key equipment.

Mitsubishi affiliate Diamond Gas has shipped the first LNG cargo from the massive LNG Canada terminal as of June 30th, local time. Japan is the “primary destination” for Mitsubishi’s offtake quota of 15%, or about 2.1 mtpa of the total LNG produced at the 14 mtpa liquefaction terminal in Kitimat, B.C.

Sakhalin-2, the Russian oil and LNG project that was handed over to local management two months ago, is now fully operational.

Japanese trading houses, Mitsui & Co and Mitsubishi Corp have cut the value of their stakes in Russia’s Sakhalin-2 LNG project by 217.7 bill yen ($1.66 bill).

The Tangguh LNG export plant in Indonesia in the Bintuni Bay region of West Papua province is progressing towards completion in mid-2022 of the third liquefaction amid the launch of carbon-capture plan in a gas field reservoir.