LNG Canada announces that it has begun production at its second unit.

The company announced that LNG Canada had begun producing liquefied gas in the second of two processing units. This unit is known as Train 2. A spokesperson said that both trains of the Shell-led Kitimat project, each with a 6.5 million ton capacity per year, are now operational. LNG Canada, Canada's first major LNG export plant and first facility on the West Coast of North America to provide direct access into Asia, the largest liquid fuel market in the world, is now operational. The facility will be able to process approximately two billion cubic feet per day when fully operational. The first LNG Canada cargo, which was built in almost seven years, arrived on June 30, 2006. Technical challenges, however, have caused the ramp-up to be slower than many analysts anticipated. The spokesperson confirmed that a 22nd LNG cargo left the LNG Canada facility Thursday to be exported to global markets. The market participants expressed their hope that the launch of the second train would create enough demand for natural gas to help reduce the glut in Western Canada storage and lift prices. LNG Canada is a joint-venture between Shell, Malaysian Petronas PGAS.KL and PetroChina. It also includes Japan's Mitsubishi Corp, South Korea's KOGAS, and Malaysia's Petronas PGAS.KL. MidOcean, an LNG company that is backed by EIG and Saudi Aramco, announced last month a plan to purchase a fifth share in the Petronas venture which holds a 25 percent stake of LNG Canada. (Reporting from Amanda Stephenson, Calgary; Curtis Williams, Houston; editing by Nathan Crooks and Emelia S. Sithole-Matarise.)

(source: Reuters)