Shell, PETRONAS, PetroChina, Mitsubishi Corporation and KOGAS have taken a final investment decision on LNG Canada Phase 2, clearing the way to double the Kitimat terminal's nameplate capacity from 14 million to 28 million tonnes of LNG per year.

The expansion adds two liquefaction trains to the existing two-train facility on British Columbia's coast, plus another LNG storage tank, a condensate tank and a second loading berth. Utilities and other processing systems will also be expanded. Shell said commercial operations from Phase 2 should begin in the early 2030s.

The decision lands just over a year after the country's first large-scale LNG export terminal started up. Phase 1 began operations on June 30, 2025, and has since shipped more than 100 cargoes from Kitimat.

"Phase 2 will double LNG Canada's capacity from 14 to 28 million tonnes a year," LNG Canada President and CEO Chris Cooper said.

Gas supply chain scales up in step

Doubling liquefaction capacity requires more feedgas. The 670-kilometer Coastal GasLink pipeline, which connects northeastern British Columbia gas supplies to Kitimat, will gain five new compressor stations to raise throughput. LNG Canada expects construction to support as many as 4,000 jobs in Kitimat at peak activity, with the compressor station build-out requiring roughly 2,100 workers.

The existing terminal and supporting infrastructure were designed from the outset to accommodate four trains, which limits the amount of new civil work required and shortens the expansion timeline relative to a greenfield site.

What it means for shipping

For LNG carriers and charterers, the FID effectively doubles the volume of cargoes available for loading at Kitimat. The terminal's owners frame the West Coast location as the commercial argument: cargoes from Kitimat reach Asian markets in roughly 10 days, avoiding the longer voyage from the U.S. Gulf Coast through the Panama Canal.

That routing advantage should support demand for modern LNG carriers on transpacific strings, with loading schedules concentrated at a single berth today and a second berth to come. Under the project's equity-lifting structure, each partner supplies gas and takes its proportional share of production, meaning offtake volumes flow to established portfolio players rather than spot tenders.

Ownership splits are unchanged: Shell holds 40%, PETRONAS 25%, PetroChina and Mitsubishi Corporation 15% each, and KOGAS 5%. Shell said its share of the expansion will give it nearly 6 million tonnes per year of additional LNG, and pointed to growing Asian demand as a key driver behind the investment.

Indigenous equity and policy tailwinds

The FID also advances a proposed Indigenous ownership stake announced in July. MNT Investments LP, representing the economic development organizations of the Gitga'at, Gitxaa?a, Haisla, Kitselas and Kitsumkalum First Nations, holds an option to invest up to C$1 billion in a special-purpose entity that would own the new LNG storage tank planned for Phase 2.

The project was referred to Canada's Major Projects Office in September 2025, and both the federal and British Columbia governments have treated it as a priority as Canada works to expand energy exports beyond the United States.

Once Phase 2 is complete, LNG Canada would rank among the world's larger LNG export facilities and materially increase Canada's share of global LNG trade — with Kitimat cargo volumes set to step up again as the new trains enter service in the early 2030s.