(WO) — Shell Canada Energy and its partners have taken final investment decision (FID) on LNG Canada Phase 2, a two-train expansion that will double LNG production capacity at the Kitimat, British Columbia, facility to 28 MMtpa.
Phase 2 will add two LNG processing trains to the existing facility, increasing capacity from 14 MMtpa. Commercial operations from the expansion are expected to begin in the early 2030s.
Shell holds a 40% interest in LNG Canada and expects to receive nearly 6 MMtpa of additional LNG from Phase 2. The other joint venture partners are PETRONAS with 25%, PetroChina with 15%, Mitsubishi Corp. with 15% and Korea Gas Corp. with 5%.
“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,” said Cederic Cremers, Shell’s Integrated Gas President.
In addition to the two new trains, Phase 2 will include another LNG storage tank, condensate tank and loading berth, along with expanded utility and process systems. Coastal GasLink will expand capacity on its existing 670-km pipeline by constructing five additional compressor stations.
The Kitimat facility sources natural gas from western Canada and provides Pacific Coast access to Asian LNG markets. Shell said its recently completed acquisition of ARC Resources further expands its upstream position in British Columbia and Alberta.
Shell expects Phase 2 to generate double-digit returns and support long-term cash flow growth as it expands its global LNG portfolio. The company forecasts global LNG demand will increase from 422 MMtpa in 2025 to nearly 700 MMtpa by 2050.
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