LNG Canada Phase 2 expansion could get October approval

Canada’s flagship project LNG Canada could see approval for its Phase 2 expansion as early as October, Reuters reported on September 17, citing sources with knowledge of the matter.

Momentum for a final investment decision (FID) on the Phase 2 expansion of the Shell-operated (NYSE: SHEL) project has been gaining in recent months. Previously, the consortium was eyeing taking FID by the end of the year.

LNG Canada shipped its first cargo of super-chilled fuel in June 2025 to South Korea. Seoul has also indicated in recent months that it is hoping to import 3.4mn tonnes of LNG from Canada, making a strong case for LNG Canada’s partners to move forward with Phase 2.

Expansion of the facility located in Kitimat, British Columbia, about 700 km north of Vancouver, also has federal and provincial backing. In July, the two governments inked a cooperation agreement to speed up development of four large LNG projects, including LNG Canada Phase 2.

As part of the agreement Ottawa has committed to collaborating with project proponents, First Nations groups, and local communities to streamline financing, permitting, and construction of the facilities.

The Phase 2 expansion would double production at the facility to 28mn tonnes per year (tpy). The expansion has also been named to Prime Minister Mark Carney’s Major Projects list, which his government has designated to fast-track as a nation-building project.

Another factor working in its favour is that construction of LNG Canada stayed largely on schedule. The facility cost CAD40bn ($28.6bn) to build.

Operator Shell holds a 40% share in the project. Malaysia’s Petronas holds a 25% interest, PetroChina (HKEX: 0857) and Japan’s Mitsubishi (TSE: 8058) have 15% stakes, and Korea’s KOGAS (KSE: 036460) holds the remaining 5% interest.

LNG Canada shipped its 100th cargo in June.