From Laggard to Leader: Canada's LNG Pivot

Ottawa and BC back LNG Canada's Phase 2 push, aiming for a year-end FID and 28 MTPA capacity

30 Jun 2026

Canada's federal government and British Columbia signed an agreement on May 14 to support the second phase of LNG Canada's export terminal, aiming to secure a final investment decision before the end of 2026. The deal would double the project's liquefaction capacity to 28 million tonnes a year by the early 2030s.

A jump of that size would alter Canada's standing in global energy markets. It would also strengthen the country's position as a supplier to gas-importing economies in Asia and Europe.

Backing the project are Shell and Petronas, whose financial weight and technical experience few rival ventures can match. Joint venture partners approved additional funding on May 1, ahead of the government's announcement, a sign that commercial momentum was already building.

Asian buyers have spent recent years searching for dependable, long-term gas supplies as alternatives to Russian and Middle Eastern sources. Against that backdrop, a positive investment decision would mark one of the largest energy infrastructure commitments in Canadian history.

For British Columbia, the gains would be domestic and immediate: more upstream activity, construction work and skilled-trades employment if the expansion proceeds. Analysts who track the sector say that closer coordination between federal and provincial governments addresses a problem that has dogged Canadian LNG projects for more than a decade, where regulatory uncertainty has long outpaced investor ambition.

Much of that gap has narrowed this year. Government backing removes a layer of policy risk that previously made lenders and investors cautious, leaving financing commitments easier to secure in the months ahead.

Should the investment decision proceed on schedule, construction could begin by 2027, with first cargoes from the expanded terminal expected in the early 2030s. That timeline would place Canada among a small group of countries positioned to expand LNG exports at scale just as global demand patterns continue to shift.