Shell and LNG Canada Partners Poised to Approve Phase 2 Capacity Doubling
Shareholders could greenlight an expansion to 28 million tonnes per year as soon as the week of September 28, 2026, the Financial Post reported Wednesday.
Shell PLC and its co-shareholders in LNG Canada Development Inc. are expected to announce a final investment decision to double the Kitimat terminal's export capacity as soon as the week of September 28, 2026, according to people familiar with the matter who asked not to be identified because the decision had not yet been made public, the Financial Post reported on Wednesday (2026-09-23). The commitment would push the facility's maximum output to 28 million metric tons per year.8
Phase 1's pace has provided shareholders with something rare ahead of a multi-billion dollar expansion: real production data. The Kitimat terminal only began exports in 2025, yet it shipped its 100th LNG cargo before Thursday (2026-06-18), less than a year into operations, the company said in a LinkedIn post. Few projects reach a Phase 2 capital decision with that kind of operational track record in hand.4
A Canadian energy industry report published Thursday (2026-06-25) put the terminal's potential Phase 2 export capacity at as much as 30 million tonnes per year. The Financial Post's sources placed the current proposal at 28 million metric tons, just below that ceiling.5,8
Asian LNG spot prices measured by JKM were at $26.05 per MMBtu on Wednesday (2026-09-23). Northeast Asian buyers in Japan, South Korea, and China form the primary market LNG Canada serves, and Phase 2 would direct additional volume toward the same buyer base now absorbing Phase 1 cargoes.8
Canada's westward LNG push carries explicit government backing. The Canadian energy industry report published Thursday (2026-06-25) identified Asia as essential for reducing the country's dependence on U.S. pipeline markets, a diversification argument that gained weight in Ottawa through 2026 as Canada sought to reduce its exposure to U.S. trade.5
A second British Columbia project is pursuing a similar objective on a longer timeline. Ksi Lisims LNG signed a 20-year heads of agreement with Santos Ltd. of Australia covering close to 10% of its planned annual output, reported by MarketScreener on Tuesday (2026-09-15) and Yahoo Finance on Wednesday (2026-09-16). It was Ksi Lisims' third supply deal of 2026, lifting total contracted volume to roughly 5 million tonnes annually against a planned 12-million-tonne capacity. The project still needs to lock in a further 3 to 4 million tonnes of commitments before backers proceed to an investment decision, Western LNG's chief executive told OilPrice.com. A Ksi Lisims FID is targeted for the end of 2026.6,7,2,3
Ksi Lisims also secured Canada's first long-term LNG supply deal with a European buyer. Berlin-based SEFE, short for Securing Energy for Europe, agreed to purchase one million tonnes per year, with shipments to begin in the early 2030s, two sources told the Globe and Mail on Tuesday (2026-05-26). TotalEnergies SE and a Shell unit had each previously committed to two million tonnes per year from the same project, together accounting for roughly one-third of the planned 12-million-tonne capacity.1,3
For LNG Canada's Phase 2, the remaining variable is whether all shareholders complete their approvals in time for an announcement in the week of September 28, 2026. The Financial Post's sources stressed anonymity precisely because that process is not yet finished, and the timeline could slip if any partner calls for further review. JKM at $26.05 per MMBtu on Wednesday (2026-09-23) frames the commercial backdrop, but a confirmed FID would lock Shell and its partners into a capital programme extending well into the 2030s, exposing them to whatever that price does across a multi-year construction schedule.8