By Ruth Liao, Thomas Seal, and Stephen Stapczynski
September 29, 2026 – Shareholders of the LNG Canada project, led by Shell Plc, have approved plans to double its capacity for exporting liquefied natural gas (LNG). This decision comes as major Asian customers face significant supply challenges.
The long-awaited choice to move forward with the second phase of the project in Kitimat, British Columbia, will increase the capacity to 28 million metric tons per year, according to Shell's statement on Tuesday. The facility on the West Coast began producing its first LNG in June 2025, with plans for the expansion to begin commercial operations in the early 2030s.
The second phase is expected to require about $23 billion in investment, as noted by the Canadian government.
The ongoing conflict in Iran and the potential closure of the Strait of Hormuz have caused an unusual tightening in global energy markets. As a result, LNG importers are looking for alternative supplies outside the Middle East, which is advantageous for exporters from the U.S. to Nigeria. Canadian Prime Minister Mark Carney has positioned the country as a strong candidate to meet this demand, highlighting the proposed LNG expansion as part of important national development projects last year.
The recent decision highlights Shell's commitment to expanding its presence in the LNG market, even as global energy companies emphasize LNG as a crucial transition fuel despite fluctuating prices in recent years. This year, gas prices have surged due to the disruption of LNG shipments from the Persian Gulf caused by the conflict, shifting expectations from an oversupply to a supply shortage.
Shell owns 40% of LNG Canada, and its location on Canada's west coast provides a strategic advantage for supplying Asia, the largest market for LNG, without having to deal with shipping bottlenecks.
The venture includes other partners such as Petroliam Nasional Bhd, PetroChina Co., Mitsubishi Corp., and Korea Gas Corp. MidOcean Energy, part of private equity firm EIG, also holds a stake through Petronas. Korea Gas, which owns 5%, plans to invest around $1.26 billion in the project.
In related news, Abu Dhabi’s XRG is looking into acquiring a stake in the LNG Canada project and has been in discussions with existing investors like PetroChina to purchase some of their shares from the first phase.
Read More: Shell Puts Canada at Heart of Growth Plans in $13.6 Billion Deal