Partners in the Shell-led LNG Canada export venture may reach a final investment decision for a Phase 2 expansion as soon as next month, according to three sources with knowledge of the matter cited by Reuters and reported by MiningWeekly.com on September 18, 2026. The Phase 2 expansion would add 14 million metric tons per annum of liquefied natural gas export capacity at the Kitimat, British Columbia facility, bringing the project's total capacity to 28 mtpa. Phase 1, which cost approximately C$40 billion, was designed to yield 14 mtpa of LNG from two processing trains and dispatched its inaugural cargo earlier this year.
The joint venture includes Shell as the lead partner, with backing from Malaysia's Petronas, PetroChina, Mitsubishi Corp, and Korea Gas Corp. LNG Canada ranks as Canada's first large-scale LNG export terminal and one of the country's largest private-sector investments. The push for Phase 2 expansion reflects growing demand from LNG purchasers, particularly in Asia, who are prioritizing supply security amid geopolitical tensions in the Middle East, Red Sea shipping disruptions, and concerns about future volumes through the Strait of Hormuz.
Interest in new LNG projects and diversified supply sources is also being driven by tight global markets, production outages at major suppliers, and robust long-term demand growth as nations transition from coal to cleaner-burning natural gas. The Kitimat facility's location on Canada's Pacific Coast provides a competitive advantage, offering shorter shipping distances to key Asian markets compared to US Gulf Coast exporters, which must transit the Panama Canal. Shell stated to Reuters that it remains engaged with venture partners to explore routes toward a potential Phase 2 expansion, emphasizing that any decision would consider competitiveness and affordability, government support, and stakeholder requirements.
LNG Canada has secured support from Indigenous communities in the region. Earlier this year, MNT Investments LP, representing a coalition of five neighboring First Nations, signed an agreement granting the coalition the option to invest up to C$1 billion into the Phase 2 expansion, representing one of Canada's largest Indigenous investment opportunities in energy infrastructure. LNG Canada stated that any potential final investment decision remains contingent on Joint Venture Participants separately meeting their commercial, fiscal, regulatory, and governance requirements.
The company aims to reach an investment decision before the end of the year.
Source: indexbox.io