The world’s energy superpowers tend to arrive by accident of geography. Canada would rather build its way there. On September 29th LNG Canada, the country’s first liquefied-natural-gas export terminal, announced a final investment decision to proceed with Phase 2 of its plant in Kitimat, British Columbia, roughly doubling its export capacity. The timing was not left to chance: Mark Carney, the prime minister, happened to be in Vancouver the same day to unveil what his office billed as a “historic investment in Canada’s energy industry.”
The numbers are sizeable. According to Oilprice.com, Phase 2 will add two processing units, or trains, lifting total production from 14m tonnes per annum to 28m. LNG Canada is a joint venture of Shell, Petronas, PetroChina, Mitsubishi and Korea Gas Corporation. Shell, which holds a 40% interest and confirmed the decision first, will receive nearly 6m tonnes a year of additional LNG. The partners will continue under an “equity lifting” structure, each responsible for marketing its own share of output and supplying its own gas. Commercial operations are expected in the early 2030s. The federal government says the expansion would make the facility the second-largest of its kind in the world, worth billions to the national economy.
Feeding the bigger plant means a bigger pipe. LNG Canada said it is working with Coastal GasLink to expand the capacity of the existing 670-kilometre pipeline from north-eastern British Columbia by building five new compressor stations. Much of that gas is extracted by hydraulic fracturing, a technique that has been linked to increasingly frequent earthquakes in the province’s Peace River region, according to CBC News.
Shell’s rationale is Asian demand. “LNG Canada is a core part of our Integrated Gas portfolio, helping to supply LNG to customers in Asia at a time when diversity of energy supplies and energy security are increasingly important,” said Cederic Cremers, the company’s Integrated Gas president. Shell’s LNG Outlook 2026 projects global demand rising by around 65% by 2050. The conviction that buyers will be there is not universally shared; some forecasters expect a glut of new supply later this decade. But if gas markets stay tight, Kitimat’s short shipping route to Asia looks well placed.
For Mr Carney, the decision is above all political vindication. Phase 2 tops the list of five “projects of national importance” he proposed in the autumn of 2025 to pivot Canadian energy exports away from the United States and refashion the country as an energy superpower. The Kitimat plant shipped its first cargo to Asia in the summer of 2025; Mr Carney wants many more. His government has streamlined approvals for megaprojects—an approach that, as critics of his building bill point out, asks voters to trust ministers over process. Chris Cooper, LNG Canada’s chief executive, obligingly supplied the language: Phase 2 is “another nation-building investment that demonstrates Canada can build big things when governments, First Nations partners, local communities, skilled trades, contractors and investors work together with shared purpose.”
The project’s timing also lands mid-campaign, ahead of British Columbia’s provincial election on October 24th. Both main parties are competing to outbid each other in enthusiasm for gas. Lorne Doerkson, the B.C. Conservative leader, promised on the trail to slash red tape and triple LNG production by 2035. The governing B.C. NDP retorted that this was not ambitious enough and that its own plans would outpace his. Only the B.C. Greens dissent, calling for a moratorium on LNG expansion and warning that fast-tracking erodes oversight and Indigenous rights.
The strongest objections come from the climate ledger. Ramping up LNG output would sharply increase emissions from British Columbia’s gas production. The industry counters that burning gas emits less than coal or oil, though some analysts dispute how clean the fuel really is once the energy and damage of producing it are counted. Environmentalists note the expansion was approved weeks after a federal report urged Canadians to prepare for a future 5°C hotter—one in which western Canada’s glaciers disappear and summer droughts lengthen, according to CBC.
The tension is now structural. Canada intends to sell emissions abroad as a strategic asset while promising to cut them at home, and to say both things in the same week—Mr Carney’s Vancouver itinerary paired the LNG announcement with a briefing on “new measures to protect Canada’s oceans.” Investors, evidently persuaded, have placed their billions. Whether Asian buyers, global prices and the climate co-operate into the 2030s is a wager Ottawa has now made official.