EL7.AI
CommoditiesMedium•23 October 2026•
4 min read

Shell Project Expansion in Canada to Raise LNG Capacity to 28 Million Tonnes

Key Facts

1The expansion will raise the facility's production capacity from 14 million tonnes to 28 million tonnes a year.
2The Canadian government expects the expansion to attract C$33 billion in private capital.
3The engineering, procurement and construction management services contract for the supply pipeline expansion is worth more than €200 million.
4Shell expects commercial operations at the facility expansion to begin in the early 2030s.

LNG Canada is proceeding with an expansion that will raise its liquefied natural gas production capacity to 28 million tonnes a year, following the final investment decision announced on 29 September 2026. The project is located in Kitimat, British Columbia, according to the Canadian government, which dates the announcement to that day. Shell said the expansion would double the facility's capacity from 14 million tonnes a year before its implementation. The government expects this phase to attract C$33 billion in private-sector investment. That estimate puts private capital at the heart of the Canadian project's expansion, alongside an increase in its LNG production capacity. Shell links the expansion to providing secure, reliable and flexible supplies to customers in Asia.

Work at the facility includes adding an LNG tank and a condensate tank, according to the project company's statement on the final investment decision for the second phase. It also includes building a loading berth, expanding the infrastructure dedicated to storing and shipping production. The expansion extends to utilities and processing systems, alongside the new storage and loading facilities. Along the facility's gas supply route, the plan includes building 5 new compressor stations on the existing 670-kilometre pipeline. TC Energy said the Coastal GasLink pipeline currently transports about 2.1 billion cubic feet of natural gas a day, the existing throughput when the expansion was announced. The announced work thus combines an expansion of the project's facilities with additional compressor stations along the existing supply pipeline route.

Asia is central to Shell's rationale for the project, based on its location and ability to serve customers in the region. Cedric Cremers, Shell's president of integrated gas, said the project was well positioned to provide "secure, reliable and flexible energy to customers in Asia". The Associated Press reported that Mark Carney said shipping from Kitimat to Asia takes between 8 and 10 days, less than half the journey time from the U.S. Gulf Coast. Ownership of the project is split between Shell, with a 40% stake, and Petronas, which holds 25%, according to Shell's statement. PetroChina and Mitsubishi each hold 15%, while Korea Gas holds 5%. The ownership structure thus brings Shell together with its partners Petronas, PetroChina, Mitsubishi and Korea Gas in a project aimed at serving Asian customers.

The new phase builds on a project whose original final investment decision dates to 1 October 2018, according to the British Columbia government. The first LNG export cargo departed the Kitimat facility on 30 June 2025, according to the project company. Alongside the expansion, the company announced an agreement giving MNT Investments an opportunity to take an ownership stake in one of its new assets. The agreement allows an investment of up to C$1 billion to acquire a majority stake in a special-purpose entity. That entity will purchase the LNG tank planned as part of the expansion, according to the company's statement on the Indigenous ownership opportunity. The investment option is thus tied to the tank to be added to the facility, through majority ownership of the entity purchasing it.

On execution, Tecnicas Reunidas secured an engineering, procurement and construction management services contract for the Coastal GasLink expansion, according to a report by Investing. The contract, announced in October, is worth more than €200 million and covers expansion work on the pipeline linked to the project. TC Energy expects construction of the pipeline expansion to begin in early 2027, according to its statement following the final investment decision. The company expects the pipeline expansion to enter service in the early 2030s, with construction followed by operation of the expanded gas transportation infrastructure. Shell also expects commercial operations at the LNG facility expansion to begin in the early 2030s, its target for bringing the new production capacity into operation.