Shell-backed LNG Canada project begins exports, set to supply growing Asian markets and support decarbonization efforts.
A significant milestone was reached in the global energy landscape yesterday as the first cargo of liquefied natural gas (LNG) successfully departed from the LNG Canada facility on the west coast of British Columbia. This landmark event, announced by Shell Canada Energy, an affiliate of Shell plc, signals the operational commencement of a project poised to play a pivotal role in meeting rising global energy demand and supporting decarbonization efforts, particularly in Asian markets.
Shell holds the largest working interest in the LNG Canada joint venture, with a 40% stake. Located in Kitimat, British Columbia, the state-of-the-art facility is equipped with two processing units, or "trains," boasting a combined annual capacity of 14 million tonnes of LNG. This initial phase of the project is a testament to years of intricate planning, colossal investment, and collaborative efforts among the joint venture partners.
The timing of LNG Canada's operational launch is particularly pertinent given the energy dynamics in Asian markets. As these economies increasingly transition away from coal-fired power generation, exports from LNG Canada are strategically positioned to contribute significantly to global decarbonization. LNG serves as a lower-carbon alternative to coal for electricity generation and can act as a reliable partner for intermittent renewable energy sources, providing stability to grids reliant on solar and wind power.
Shell's own LNG Outlook 2025 forecasts a substantial surge in global LNG demand, projecting an approximate 60% rise by 2040, primarily fueled by robust economic growth across Asia. The strategic location of LNG Canada on Canada's Pacific Coast offers a distinct advantage, efficiently connecting cost-competitive upstream gas from British Columbia to this burgeoning Asian demand.
Beyond its global energy implications, the LNG Canada project is already generating substantial economic benefits for British Columbia. It represents a significant new source of economic development, delivering a competitive, secure, and reliable energy source in close partnership with local communities and First Nations. Over 50,000 Canadians have been employed on the venture, with more than CAD $5.8 billion in contracts and subcontracts awarded to local, Indigenous-owned, and other businesses within the province.
The LNG Canada joint venture is a collaborative effort comprising Shell plc (40%), PETRONAS (25%), PetroChina Company Limited (15%), Mitsubishi Corporation (15%), and Korea Gas Corporation (5%). Each participant will independently supply their own natural gas and market their respective share of LNG produced from the facility, ensuring a diversified supply chain from day one.
