Shell still expects mid-year launch for LNG Canada

Shell’s finance chief, Sinead Gorman, told analysts during Shell’s fourth-quarter earnings call on Thursday that LNG Canada is making “great progress and hoping to move forward towards the first cargo, of course, in the middle of the year, same as we’ve talked about before.”

One of the largest private investments in Canadian history, LNG Canada will initially produce 14 million tonnes per annum (mtpa) LNG for export with plans to double its capacity to 28 mtpa with a proposed Phase 2 expansion.

Besides operator Shell, other partners in the project include Malaysia’s Petronas, PetroChina, Japan’s Mitsubishi Corporation, and South Korea’s Kogas.

In August 2024, LNG Canada introduced natural gas to the facility for the first time, from the new Coastal GasLink pipeline.

In October 2024, LNG Canada started cooldown activities at its liquefaction and export terminal in Kitimat, as part of the project’s commissioning and start-up phase.

Contractor JGC Fluor is constructing the first phase of the project that includes two liquefaction trains.

Expansion

Answering a question later during the earnings call about capital deployment, Shell CEO Wael Sawan said that one of the projects where Shell could deploy its capital is the second phase of LNG Canada.

“LNG Canada will be one that when the venture is ready to put a proposal in front of us, we will scrutinize it and we will look at it in the context of does it give us the appropriate return for the risk that we would be taking,” he said.

Sawan said that Shell appreciates the support it has been getting from the provincial government, the federal government, the indigenous people, as well as from “many of our neighbors in Canada” regarding the second phase.

“If there was one thing that we will need to keep an eye on uh it is going to be what is the capital that is going to be required to invest,” he said.

He said LNG Canada is “one of the cleanest plants in the world in terms of an emissions perspective.. and of course, you have the proximity to the Asian market being on the west coast of Canada.”

“So there are so many attractive things, but it needs to make commercial sense and we’ll need to see whether the price of the EPC bid is one that we can essentially bank on to be able to pass our expectations of returns against the risk profile we take,” Sawan said.