LNG Canada to make decision on phase 2 expansion by end of year, Canada Minister says

• The expansion would double LNG Canada's capacity from 14 million metric tons per year to 28 million metric tons annually
• Shell and partners approved hundreds of millions (CDN) in funding on May 1 to finalize engineering, First Nations agreements, supply chain work, and marine terminal construction
• The Kitimat, B.C. facility began operations in June 2025 but exceeded regulatory flaring limits in multiple months during startup, which the CEO said is normal for new LNG facilities

LNG Canada Phase 2 Expansion Summary

Key Decision Timeline

Shell-led LNG Canada will make a final investment decision (FID) on its Phase 2 expansion by year-end 2025, according to Canada's Natural Resources Minister Tim Hodgson. On May 1, Shell and its partners approved hundreds of millions of Canadian dollars in incremental funding to advance critical pre-FID work.

Project Details

LNG Canada's facility in Kitimat, British Columbia, began operations in June 2025 with a current capacity of 14 million metric tons per year. The proposed Phase 2 expansion would double that capacity to 28 million metric tons annually.

Outstanding Work

Before reaching FID, the consortium must complete several items:

• Additional engineering studies
• Agreements with First Nations communities
• Supply chain and procurement arrangements
• Construction progress at the marine offloading terminal

The Canadian federal government is collaborating with British Columbia and project partners to finalize these requirements.

Operational Issues

CEO Chris Cooper addressed regulatory concerns about the facility exceeding flaring limits during multiple months in fall and winter. He characterized the elevated gas flaring volumes as typical for LNG facilities during startup phases, expecting them to decline as operations stabilize.

Market Implications

This expansion represents a significant development for North American LNG export capacity. The project's doubling would position Canada as a more substantial player in global LNG markets, particularly serving Asian demand. The timeline indicates potential new supply coming online in the late 2020s, subject to FID approval and construction timelines.