LNG Canada increases production as Iran's war threatens global supplies

LSEG data shows that LNG Canada, a Shell venture, has increased production and exports to Asia in the past month. This is because 'the iran war' threatens Asian gas supplies, which are especially vulnerable to global disruptions. Data shows that the LNG project in Kitimat (British Columbia), which started operations in June of 2025, exported five cargoes during the first eleven days of March. This is already more than half the volume in February. The sixth shipment will depart on Tuesday.

Two cargoes were sent to Japan, two to South Korea, and one to Philippines. According to LSEG data, the plant appears to be close to operating at its full capacity of 14.?million metric tonnes per year. LNG Canada's spokesperson declined to comment on current production levels but stated that the company is continuing its early operations safely and responsibly. The spokesperson stated in an email that "a 58th shipment is scheduled to leave in the next few days."

The company can export slightly less than 1.2 million metric tonnes per month. The data shows that in the first third of this month, it loaded over 400,000 tons. The global markets have been forced to adjust after Qatar, which supplies 20% of the LNG traded globally, was forced by the conflict to stop production and declare force majore.

ROUTE TO THE PACIFIC

Martin King, analyst at RBN Energy, said that they are stepping up their efforts to reach full capacity and to increase LNG production to take advantage of the higher prices in Asia. LNG Canada was the first large-scale Canadian LNG plant to begin production. It is also the first major North American plant to have direct access to Pacific Ocean, reducing the sailing time for Asian buyers in comparison to U.S. Gulf Coast exporters. The plant has faced challenges in its operation since it was launched, but output has increased since January according to LSEG data.

Canadian gas producers increased production in anticipation of LNG Canada's launch last summer. However, prices fell when the project failed to draw down supplies at the rate that the markets expected.

Mike Belenkie is the CEO of Advantage Energy, one of several companies who temporarily reduced production in September when Western Canadian natural gas temporarily fell below zero.

The daily spot price at the Alberta Energy Company's (AECO) storage facility hovered around $2 per million British Thermal Units on Tuesday. This was a $1.25 reduction from the U.S. Henry Hub benchmark. Curtis Williams reported from Houston, Amanda Stephenson from Calgary and Nathan Crooks edited the story.

(source: Reuters)