Tuesday, July 1, 2025

Canada exports first LNG cargo from Pacific Coast

June 30, 2025

A spokesperson for Shell-led LNG Canada confirmed on Monday that Canada's first LNG export cargo was shipped from its Pacific Coast to Asia. The cargo was loaded on the tanker Gaslog Glasgow at LNG Canada's Kitimat site, British Columbia. This happened just over a weeks after the facility had confirmed its first production. It became the first large commercial LNG operation of the country. LNG Canada is North America's first major LNG plant with direct access to Pacific Coast. The project comes at a moment when tensions over trade with the United States are increasing Canada's desire for diversification of its export markets. In an interview, LNG Canada CEO Chris Cooper cited the trade tensions as a reason for Canada's need to diversify its export markets.

The LNG Canada joint venture, a joint project between Shell Plc and Petronas and PetroChina and Mitsubishi Corp, Kogas and Mitsubishi Corp, cost around CDN$40 billion ($29.4 billion US) to build and is considered the largest private sector investment in Canadian History.

It will be able to export up to 14 million tonnes of LNG annually when fully ramped-up.

Shell and its partners will make a final decision on investment next year to double the project's capability, Cedric Cremers, chief of Shell's Gas Business told reporters.

Canada is the fifth largest producer of natural gas in the world and the fourth biggest exporter, but up until now almost all of these exports went to the United States.

LNG Canada gives the natural gas producers of Canada access to the energy-hungry Asian market for the first. The Pacific coast offers a direct shipping path to Asia, without the need to pass through the Panama Canal. Project partners hope that this will give Canadian LNG a competitive advantage over U.S. competitors who have facilities on the Gulf Coast.

LNG Canada has an advantage in terms of supply costs. The price of Canadian natural gas, which will be transported to LNG Canada via the Coastal Gaslink pipe from the shale-fields of northeast British Columbia, is currently less than half that of the U.S. Henry hub benchmark.

Mark Fitzgerald, CEO of Petronas Canada at a Calgary conference in June, said that the West Coast LNG developed in Canada is a strong competitor to anything in the United States.

LNG Canada, which was first proposed by the Canadian government in 2012, comes nearly 10 years after the United States began exporting LNG to the lower 48 States. Since then, the United States has become the largest LNG exporter in history. Many Canadians who work in energy say that Canada has taken too long to develop its own industry. Canada is also preparing to launch additional LNG projects. The Cedar LNG and Woodfibre LNG Projects are two smaller Pacific coast LNG Facilities currently under construction. LNG Canada is also considering a second phase expansion, which would double its facility's capability.

RJ Johnston said that while Canadian LNG has some positive aspects, it also has its negatives. He is the incoming director of Energy and Natural Resource Policy at the School of Public Policy of the University of Calgary.

He said that building new Canadian LNG pipelines and facilities along British Columbia's remote north coast, where infrastructure is already in place to service the LNG sector, is more difficult and costly than doing so along the U.S. Gulf Coast, where infrastructure is already in place.

Ed Kallio is the executive advisor at Incorrys. He said that greenhouse gas regulations in Canada are weakening the case for increasing LNG production. U.S. producers do not face these regulations.

The price of (clean) electric power to run these processes is the major risk in future LNG developments in Canada, he said.

1 CAD = 0.73 USD (Reporting from Amanda Stephenson, Calgary; Additional reporting and editing by Shadia Nasralla)

(source: Reuters)

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