LNG Canada greenlights Phase 2 expansion at B.C. terminal

Key Takeaways:

• LNG Canada’s joint venture partners approved the Phase 2 expansion in Kitimat, doubling processing capacity to 28 million tonnes per annum.
• The project includes two new liquefaction trains, a storage tank, a loading berth, and five new compressor stations along the Coastal GasLink pipeline.
• The decision activates a $1-billion equity partnership with five neighboring First Nations to purchase the Phase 2 storage tank, while generating 6,100 peak construction jobs and over $50 billion in public revenues.

The Whole Story:

Joint venture participants in LNG Canada—Shell, PETRONAS, PetroChina, Mitsubishi Corporation, and KOGAS—have reached a Final Investment Decision (FID) to proceed with the Phase 2 expansion of its export terminal in Kitimat, British Columbia. The expansion will double the facility’s production capacity from 14 million tonnes per annum (mtpa) to 28 mtpa, establishing LNG Canada as one of the largest LNG export terminals globally and advancing Canada’s position toward becoming a top five global LNG exporter.

The Phase 2 project will construct two additional processing trains within the existing footprint, alongside a second LNG storage tank, a condensate storage tank, a dedicated loading berth, and expanded process utilities. As execution manager, LNG Canada will collaborate with Coastal GasLink to expand the capacity of the 670-kilometre feedgas pipeline through the construction of five new compressor stations.

The decision triggers the execution of a landmark equity option agreement reached in July 2026 with MNT Investments LP, representing five local First Nations: Gitga’at, Gitxaała, Haisla, Kitselas, and Kitsumkalum. The partnership enables an Indigenous capital investment of up to $1 billion to acquire the future Phase 2 LNG storage tank, marking one of the largest Indigenous ownership stakes in Canadian infrastructure history.

“LNG Canada Phase 2 is another nation-building investment that demonstrates Canada can build big things when governments, First Nations partners, local communities, skilled trades, contractors and investors work together with shared purpose,” said Chris Cooper, President and CEO of LNG Canada. “With FID secured, Phase 2 will double LNG Canada’s capacity from 14 to 28 million tonnes a year… helping move Canada toward becoming one of the world’s top five LNG exporting nations.”

Tim Hodgson, Minister of Energy and Natural Resources, framed the announcement as a milestone for national trade strategy: “At a time when our country must build a stronger economy that allows us to be an energy superpower for the long term, this is exactly the kind of investment Canada needs: catalyzing private capital, diversifying trade, strengthening global energy security, fostering Indigenous partnership, and turning our world-class resources into Canadian lasting prosperity.”

Federal and provincial projections estimate Phase 2 will generate more than $50 billion in total government revenues over its operating lifecycle through taxes, royalties, and direct economic activity. At peak construction, the project is expected to create 4,000 site construction jobs in Kitimat and 2,100 pipeline extension jobs along the Coastal GasLink right-of-way, eventually adding 240 permanent operational roles to the facility’s existing 400-person local workforce.

Project timeline

• November 2011: Shell, PetroChina, Mitsubishi, and KOGAS establish LNG Canada to explore developing an export terminal in Kitimat, B.C.
• June 2015: The project receives its Environmental Assessment Certificate from provincial regulators following extensive community consultations.
• October 2018: Joint venture partners (joined by PETRONAS) give the official green light to the $40-billion Phase 1 build, initiating construction on the first two processing trains and the connecting Coastal GasLink pipeline.
• June 2025: LNG Canada achieves operational status, shipping its first export cargo from Kitimat aboard the Gaslog Glasgow to Asian markets.
• November 2025: The terminal’s second processing train enters service, bringing Phase 1 to full operating capacity.
• July 2026: LNG Canada signs a landmark equity option agreement with MNT Investments LP, representing five local First Nations.
• September 2026: Partners formally approve Phase 2, committing to double capacity to 28 mtpa and activating the $1-billion Indigenous ownership stake.