Canada has officially entered the ranks of global LNG exporting nations with the departure of the first cargo from LNG Canada, the country’s first large-scale liquefied natural gas export terminal.
Located in Kitimat on British Columbia’s remote Pacific coast, LNG Canada is a joint venture between Shell (40% and operator), PETRONAS, PetroChina, Mitsubishi, and KOGAS. The project marks a major milestone for Canada’s energy sector, with ambitions to deliver lower-carbon energy to global markets while strengthening economic ties with Asia.
Two-Train, 14 MTPA Capacity
The new facility begins operation with two processing units (or “trains”) capable of producing 14 million tonnes per annum (mtpa) of LNG. The partners are also evaluating a potential Phase 2 expansion that could double capacity to 28 mtpa by adding two additional trains.
Shell describes LNG as a lower-carbon alternative to coal for electricity generation and as a flexible partner to intermittent renewable energy. LNG Canada’s Pacific Coast location gives it direct access to fast-growing Asian markets seeking to reduce reliance on coal, with Shell forecasting global LNG demand to rise by 60% by 2040.
“LNG Canada grows our leading integrated gas portfolio, providing a reliable supply of LNG to markets, most notably in Asia,” said Cederic Cremers, Shell’s President of Integrated Gas. “We expect that supplying LNG will be the biggest contribution Shell will make to the energy transition over the next decade.”
Collaboration with Indigenous Communities
LNG Canada was built on the traditional territory of the Haisla Nation. The joint venture emphasizes deep, sustained collaboration with Indigenous communities, describing this approach as key to its success.
“Congratulations to our partner LNG Canada on this monumental day,” said Haisla Nation Chief Councillor Crystal Smith. “This milestone is a testament to what can happen when industry elevates and respects the role of Indigenous communities in major projects. So much has changed for our community since that first meeting.”
The project claims over CAD $5.8 billion in contracts and subcontracts with local and Indigenous-owned businesses. More than 50,000 Canadians worked on building Phase 1, while the connecting Coastal GasLink pipeline project employed over 25,000 Canadians. LNG Canada itself has created over 300 permanent full-time jobs.
Economic and Community Benefits
LNG Canada also invested over CAD $10 million in workforce development, supporting training programs for local residents and Indigenous communities. It has contributed more than CAD $13 million to programs and equipment benefiting the Kitimat, Terrace, and surrounding First Nations communities, while also supporting new housing development in the region.
Prime Minister Mark Carney praised the milestone:
“With LNG Canada’s first shipment to Asia, Canada is exporting its energy to reliable partners, diversifying trade, and reducing global emissions — all in partnership with Indigenous Peoples.”
British Columbia Premier David Eby added:
“LNG Canada’s first cargo shipment to Asia marks a major milestone in our efforts to build a stronger, more diversified economy that creates good jobs and makes us all better off.”
Industry Partner Reflections
Each joint venture partner will supply its own gas and market its share of LNG:
-
PETRONAS: “This new supply node advances secure, reliable, and responsibly sourced LNG to meet our customer needs and support global energy demand,” said Adif Zulkifli, Executive Vice President.
-
Mitsubishi Corporation: “This achievement contributes not only to the local economy but also to long-term employment, making it a significant driver for the Canadian economy,” said Masaru Saito, Group CEO.
-
PetroChina Canada: “It represents the culmination of world-class technological integration and a new chapter in global energy collaboration,” said Zhiyong Liu, President and CEO.
-
KOGAS: “We congratulate our partners and express our gratitude to the project contractors. We are confident LNG Canada will demonstrate the highest standards of safety, reliability, and competitiveness,” said Yeonhye Choi, President and CEO.
A Debate Over LNG’s Role in Emissions Reductions
Despite the milestone, Canada’s bet on LNG as a transition fuel has its skeptics. Proponents argue LNG can help Asia displace coal and cut emissions. Alberta Premier Danielle Smith pointed to a Fraser Institute study suggesting Canada could reduce global emissions by up to 630 million tonnes annually if its gas displaced coal in Asia.
“That’s almost 90 per cent of Canada’s total GHG emissions each year,” Smith told the Global Energy Show.
However, experts caution that these claims are complicated.
“Will all of our natural gas exports be displacing coal? Absolutely not. Will a portion of them be? Probably. But it’s hard to know exactly what that number is,” said Kent Fellows, assistant professor at the University of Calgary’s School of Public Policy.
He noted much of the gas could end up replacing other sources, like Russian or Middle Eastern supplies, rather than coal, making the emissions benefits uncertain.
Cost and Infrastructure Challenges
Michael Sambasivam from Investors for Paris Compliance questioned whether developing countries would replace cheap, domestic coal with expensive imported LNG without large subsidies.
“There’s a lot of infrastructure that needs to be built to take in LNG as well as to use it. You have to build import terminals. You have to refit your power terminals.”
Devyani Singh of Stand.earth highlighted methane leakage during production and transport as a significant climate risk, noting methane is 80 times more potent than CO₂ over 20 years.
“Even if LNG does have an edge over coal, thinking about it as a ‘transition’ or ‘bridge’ fuel at this juncture is a problem. The time for transition fuels is over.”
Future Outlook
Shell and its partners continue to explore LNG Canada Phase 2, which could double its capacity to 28 mtpa. Canada, meanwhile, has seven LNG export projects and one infrastructure project in various stages of development, with a potential capital investment of nearly $109 billion and possible production capacity of over 50 mtpa of LNG by 2030.
This first successful cargo cements Canada’s place on the global LNG map—an achievement celebrated by industry leaders, government officials, and local communities alike, even as debate over LNG’s climate role continues.
