Shell approves final investment decision for LNG Canada Phase 2
- Phase 2 adds two liquefaction trains, doubling LNG Canada capacity from 14 mtpa to 28 mtpa.
- Shell holds a 40% interest and will receive nearly 6 mtpa of additional LNG from the expansion.
- Commercial operations for Phase 2 are expected to begin in the early 2030s.
- Phase 2 scope includes an extra LNG storage tank, condensate tank, loading berth, expanded utility/process systems and five new Coastal GasLink compressor stations.
Project decision and scale
Shell Canada announced a final investment decision for LNG Canada Phase 2, which will add two liquefaction trains and increase the Kitimat facility’s production capacity from 14 million tonnes per annum (mtpa) to 28 mtpa.
Shell stake and offtake
Shell holds a 40% interest in LNG Canada and will receive nearly 6 mtpa of additional LNG from the expansion. The facility will continue to operate under an equity lifting structure, with each joint venture participant responsible for offtake of its proportionate share and for bringing its share of gas supply.
Partners and project scope
The LNG Canada joint venture comprises Shell (40%); PETRONAS (25%); PetroChina (15%); Mitsubishi Corporation (15%); and Korea Gas Corporation (5%). Phase 2 will add two LNG trains within the existing Kitimat site, plus an additional LNG storage tank, condensate tank, a loading berth, and expanded utility and process systems.
Pipeline, timeline and returns
Coastal GasLink will expand pipeline capacity by constructing five new compressor stations along the existing 670‑kilometre route. Commercial operations are expected in the early 2030s. Shell says the investment fits its capital allocation framework and is expected to generate double‑digit returns and an internal rate of return above the Integrated Gas business hurdle rate; Shell also cites its LNG Outlook projecting global demand rising around 60% by 2040 and around 65% by 2050.
Source: Shell