LNG Canada partners expected to green-light multibillion-dollar expansion Tuesday

Partners in the Shell-led LNG Canada project on the B.C. Coast are expected to announce on Tuesday that they have agreed to proceed with a $30-billion-plus expansion of the facility against a backdrop of surging global demand for the fuel.

Plans call for doubling the capacity of the plant, located at Kitimat, B.C., to as much as 30 million tonnes of liquefied natural gas per year. LNG Canada began exports to Asia from its first phase in 2025.

Sources familiar with the situation said the partners will announce in Vancouver the green light for the massive project. The Globe and Mail is not naming the sources, as they were not authorized to speak publicly about the plans.

Prime Minister Mark Carney and Natural Resources Minister Tim Hodgson will be in the West Coast city for an announcement about energy on Tuesday, according to their schedules. The LNG Canada expansion was early among those referred to Mr. Carney’s Major Projects Office be considered for fast-track approval.

The project is expected to attract $33-billion in private investment to Canada, according to the MPO’s website.

The consortium had targeted a decision by the end of this year on moving forward with the project.

LNG Canada spokesperson Paul Hagel declined to comment on whether the partners will announce the final investment decision on Tuesday. “Our joint venture partners continue to undertake their own assurance process for a potential phase 2 decision,” he said. Carolyn Svonkin, spokesperson for Mr. Hodgson, also declined to comment. The expected announcement was previously reported by Bloomberg.

The Prime Minister has championed increasing energy shipments to diversified global markets to reduce the country’s reliance on the United States, which buys the lion’s share of Canada’s oil and gas exports. Projects such as LNG Canada 2 and Alberta’s West Coast oil pipeline proposal are both aimed at bolstering the economy against U.S. President Donald Trump’s trade war.

Meanwhile, the U.S. war in Iran, with the resultant virtual closure of the Strait of Hormuz, has driven up prices for seaborne natural gas, and traders expect fears of supply shortages to persist well beyond the winter. European countries have been seeking new gas supply sources since Russia invaded Ukraine.

The situation has created opportunities for alternative suppliers, like Canada, which has entered the global market after years of delay. It also holds out the promise of higher returns for Canadian natural gas producers, including London-based Shell PLC, which have been bulking up on new reserves in northeastern B.C. to take advantage of the new markets.

Shell owns the largest stake in LNG Canada at 40 per cent, followed by Malaysia’s state-owned Petronas (25 per cent), Japan-based Mitsubishi (15 per cent), PetroChina (15 per cent) and South Korea’s Kogas (5 per cent).

Last September, U.S.-based MidOcean Energy acquired a 20-per-cent interest in key Petronas assets in Canada, including natural gas operations in northeast B.C. and the Petronas stake in LNG Canada. Some of the partners are seeking to cash out of portions of their interests as well amid expressions of interest from global private-equity players and others.

Earlier this year, LNG Canada agreed to take the lead role in developing plans for an expansion of the Coastal GasLink pipeline, which transports natural gas from northeast B.C. to Kitimat. Calgary-based TC Energy Corp. operates Coastal GasLink and owns 35 per cent of the pipeline, which attracted significant Indigenous opposition when constructed.

With a report from Reuters