Shell Canada Energy has taken a final investment decision on LNG Canada Phase 2, adding two LNG processing trains that will double the Kitimat, British Columbia facility's production capacity from 14 million tonnes per annum to 28 mtpa. Shell holds a 40% interest in the project and will receive nearly 6 mtpa of the additional LNG. Commercial operations at the expanded facility are expected to begin in the early 2030s.
Cederic Cremers, Shell's Integrated Gas President, said LNG Canada is central to Shell's Integrated Gas business, feeding LNG to Asian customers as buyers place a higher value on secure, diverse energy supply. He said Phase 2 supports Shell's objective to be the world's leading integrated gas and LNG business by "connecting Canadian resources with Shell's global LNG portfolio, trading capability and customer reach." Shell said the project fits within its disciplined approach to capital spending, expects double-digit returns from it, and expects the resulting internal rate of return to clear the minimum threshold it sets for Integrated Gas investments.
Ownership and offtake
LNG Canada is a joint venture operated by LNG Canada Development Inc., with Shell partnered by PETRONAS, PetroChina, Mitsubishi Corporation and Korea Gas Corporation. Under an equity lifting structure, each partner is responsible for taking its own share of LNG production and for supplying its own share of feed gas.
| Partner | Stake |
|---|---|
| Shell | 40% |
| PETRONAS | 25% |
| PetroChina | 15% |
| Mitsubishi Corporation | 15% |
| Korea Gas Corporation | 5% |
What Phase 2 adds
The expansion adds two LNG trains inside the existing Kitimat facility, plus an additional LNG storage tank, a condensate tank, a loading berth, and expanded utility and process systems. A train is a processing unit that cools natural gas into liquid form for shipping; adding a second one is how the site's throughput doubles. Coastal GasLink plans five new compressor stations along its existing 670-kilometer pipeline to add capacity.
Market backdrop
Shell said Kitimat's location leaves it able to supply Asian buyers with cost-competitive gas. The company's LNG Outlook 2026 projects global LNG demand will rise by around 60% by 2040 and around 65% by 2050. Global LNG demand is expected to increase from 422 mtpa in 2025 to nearly 700 mtpa by 2050. Shell said it reaffirmed, at its 2025 Capital Markets Day, plans to stay a leading integrated gas and LNG business into the 2040s. In the third quarter of 2026, Shell completed its acquisition of ARC Resources Ltd., a British Columbia and Alberta-based energy company, following shareholder, court and regulatory approvals.
