Shell Canada Energy, an affiliate of Shell plc, has taken a final investment decision on LNG Canada Phase 2 which will double production capacity at the facility in Kitimat, British Columbia.
Cederic Cremers, Shell’s Integrated Gas President, commented: “LNG Canada is a core part of our Integrated Gas portfolio, helping to supply LNG to customers in Asia at a time when diversity of energy supplies and energy security are increasingly important. Phase 2 supports Shell’s strategic objective to be the world’s leading integrated gas and LNG business by connecting Canadian resources with Shell’s global LNG portfolio, trading capability, and customer reach.”
Phase 2 will add two LNG processing units, known as trains, increasing LNG Canada’s total production capacity from 14 million tpy to 28 million tpy. Shell has a 40% interest in LNG Canada and will receive nearly 6 million tpy of additional LNG from the expansion. Commercial operations are expected to begin in the early 2030s.
The investment is consistent with Shell’s disciplined capital allocation framework and is expected to generate double-digit returns while supporting long-term cash flow growth.
The facility in Kitimat is positioned to supply cost-competitive gas to Asian markets, where demand for LNG is expected to increase significantly. According to Shell’s LNG Outlook 2026, global LNG demand is expected to rise by around 60% by 2040 and around 65% by 2050, driven by growing energy demand and the need for secure, flexible, and reliable energy supplies.