LNG Canada Phase 2 Reaches FID, Doubling Capacity to 28 mtpa as Asia Seeks Non-Gulf Supply

Shell (NYSE:SHEL), PETRONAS, PetroChina, Mitsubishi and KOGAS approved the final investment decision for the LNG Canada Phase 2 expansion last month, doubling the Kitimat, British Columbia facility's capacity to 28 million tons per annum and reinforcing Canada's position as a long-term supplier to Asia. With Cedar LNG and Woodfibre under construction, Canada is expected to export 33 mtpa of LNG by the end of the decade, according to Wood Mackenzie, which projects Asian demand will double from roughly 260 mtpa today to around 500 mtpa by 2060. Cargoes from British Columbia reach Tokyo in about 8 to 9 days versus 16 to 18 days from the U.S. Gulf Coast, per S&P Global, and the Coastal GasLink pipeline delivers 2.1 Bcf/d of discounted upstream gas to the terminal. U.S. LNG shipments to Asia more than doubled (+108%) in the first half of 2026 amid Strait of Hormuz disruptions. WoodMac warns Canada's window is narrowing as U.S. projects including CP2 LNG, Commonwealth LNG and Delfin FLNG 1 reached FID this year, and it will fall well short of Prime Minister Mark Carney's 100 mtpa export target.