LNG Canada, led by Shell, has officially started producing liquefied natural gas (LNG) at its new export terminal in Kitimat, British Columbia. This is the first time Canada has produced LNG for export, with the first shipment expected to be loaded by mid-year.

According to sources familiar with the start-up, LNG production began at around 4 a.m. local time. For now, gas is being processed through the plant’s first train-known as Train 1, which has a capacity of 5.6 million tonnes per annum (mtpa).

While production has started, the facility is not yet running at full capacity due to a technical issue with one of the processing lines. As a result, only part of the plant is currently operational.

Ship tracking data from LSEG shows that the LNG tanker Gaslog Glasgow is on its way to the Kitimat terminal. The vessel is expected to arrive on June 29 and will be loaded with LNG once it docks, according to sources.

When fully operational, the LNG Canada facility will have an export capacity of 14 mtpa. The terminal is being built as part of a joint venture between several international companies: Shell holds a 40% stake, Malaysia’s Petronas owns 25%, Mitsubishi Corporation and PetroChina each have 15%, and Korea Gas Corporation (Kogas) holds 5%.

The plant is designed to process up to 1.9 billion cubic feet of natural gas per day. The total cost of the project is estimated at $40 billion, making it one of the largest energy investments in the country’s history.

Once LNG Canada reaches full operation, industry analysts expect it to shift a portion of Canada’s natural gas exports away from the United States and toward international markets. Until now, almost all of Canada’s gas exports have gone to its southern neighbor.

Data from the U.S. Energy Information Administration shows that Canadian gas exports to the U.S. increased to about 8.6 billion cubic feet per day in 2024. That’s up from 8 bcf/d in 2023 and higher than the five-year average of 7.5 bcf/d.

Additionally, two more LNG export terminals-Woodfibre LNG and Cedar LNG, are currently under construction along Canada’s Pacific Coast. Both projects are expected to be completed between 2027 and 2028.

References: offshore technology, oil price

Marine Insight