Shell Backs Expansion That Would Double LNG Canada’s Capacity

Shell and its partners have approved an expansion that would double LNG Canada’s annual capacity. The project promises more gas for Shell in the early 2030s, with costs and future prices shaping its return.

Shell and its partners have approved a major expansion of LNG Canada, committing to more export capacity years before it is expected to come online.

The second phase will add two processing units at the facility in British Columbia. That would lift annual capacity from 14 million to roughly 28 million tonnes of liquefied natural gas. Commercial operations are targeted for the early 2030s.

Shell owns 40% of the joint venture and expects to receive nearly six million additional tonnes of LNG a year from the expansion. The decision commits the partners to a multibillion-dollar project and signals confidence in demand for Canadian gas exports.

For Shell investors, the project offers a route to greater LNG supply over the long term. Its returns will depend on construction costs, delivery and the prices Shell can secure when the additional gas reaches customers.

The approval moves LNG Canada’s expansion from a proposal to a major investment commitment. The financial payoff, however, is still years away.