The British energy group Shell, together with partners from the Far East, has approved the investment for the second phase of an LNG project in Canada. This will double capacity at Kitimat, from where ships will also set sail.
The Shell Canada Energy joint venture has announced the final investment decision for Phase 2 of “LNG Canada”. The project is a key part of Shell’s “Integrated Gas” portfolio and helps to supply customers in Asia with LNG.
Cederic Cremers, President of “Integrated Gas” at Shell, emphasised that this is “a time when diversification of energy supply and energy security are becoming increasingly important.”
As part of Phase 2, two further LNG processing units – known as “trains” – will be constructed, increasing LNG Canada’s total production capacity from 14 million tonnes per annum (mtpa) to 28 mtpa. In addition, storage facilities and a ship-loading terminal are planned.
Shell holds a 40% stake in LNG Canada and will receive an additional nearly 6 mtpa of LNG as a result of the expansion. Commercial operations are expected to commence in the early 2030s. The other partners are Petronas (25 per cent), PetroChina (15 per cent), Mitsubishi (15 per cent) and Korea Gas Corporation (5%).
According to the information provided, the Kitimat facility is strategically located to supply cost-effective gas to Asian markets, where a significant rise in LNG demand is expected. According to Shell’s “LNG Outlook 2026”, global LNG demand is forecast to rise by around 60 per cent by 2040 and by around 65 per cent by 2050 – driven by growing energy needs and the demand for a secure, flexible and reliable energy supply.
