LNG Canada Approves C$33 Billion Kitimat Expansion to Double Capacity
LNG Canada's owners approved a C$33 billion Phase 2 expansion at Kitimat, doubling capacity to 28 million tons a year and expanding the Coastal GasLink pipeline.
The partners behind Canada's first large-scale liquefied natural gas export terminal have approved a C$33 billion (US$23 billion) expansion of the Kitimat facility in British Columbia, a move that will double its capacity and broaden the country's reach into overseas energy markets.
LNG Canada said its owners reached a final investment decision on Phase 2 of the project, lifting capacity to 28 million tons a year. The build-out will add two LNG processing units, another storage tank and an additional loading berth, drawing on infrastructure already in place from the first phase, which began exports last year.
The venture is owned by Shell of Britain, Malaysia's Petronas, PetroChina, Japan's Mitsubishi Corp. and South Korea's KOGAS. Natural gas from western Canada is piped to Kitimat, where it is cooled to liquid form and loaded onto tankers, mainly for Asian buyers. LNG is natural gas converted to liquid for shipping and storage before being turned back into gas for heating, electricity generation and industrial use.
Prime Minister Mark Carney said the expansion would make LNG Canada the second-largest facility of its kind in the world and create as many as 4,000 jobs at peak construction.
"Today's investment is being made in a different environment: a more dangerous and divided world," Carney said. "A world where Canada fully values export diversification and the greater sovereignty it confers."
Carney has made reducing Canada's economic dependence on the United States a priority, as tariffs and other trade restrictions imposed by U.S. President Donald Trump have strained ties between the two allies. He said Canada's Pacific Coast gives the project an edge over U.S. LNG exporters, with shipments from Kitimat reaching Asia in eight to 10 days — less than half the transit time from the U.S. Gulf Coast.
The expansion will also drive a multibillion-dollar enlargement of the TC Energy-operated Coastal GasLink pipeline, which carries natural gas from Dawson Creek to Kitimat. TC Energy said it will add compressor stations and upgrade facilities, nearly doubling the pipeline's capacity and creating up to 2,100 jobs at peak construction.