Canada’s First Large-Scale LNG Facility Starts Production

 

LNG Canada confirmed that it produced its first LNG last weekend and remains on track to begin export shipments in the coming days or weeks. It marks a major milestone for the project, which has been years in the making, and becomes Canada’s first large-scale LNG export terminal.

The project is reported to have cost as much as C$40 billion (US$29 billion) and is also the first LNG terminal in proximity to the Pacific Coast offering shorter transport distances to Asia. It is a joint venture led by Shell and includes Malaysia’s Petronas, Mitsubishi, Korea Gas, and PetroChina. The Canadian government has called it the “largest single private sector investment” in the history of Canada.

While confirming the production, LNG Canada has not announced the details for its first export. Reuters, however, reports that LNG carrier Gaslog Glasgow is approaching the Canadian coast and appears ready to take the shipment. They are estimating its arrival date as June 29, and reports are that two other gas carriers also appear bound for the terminal, which is located approximately 400 miles from Vancouver.

The facility remains on schedule with the details released by the operator. In April, it received its first inbound cargo to begin the cooldown process ahead of production. Once fully operational by late this year or in 2026, it will have a capacity of 14 million metric tons (mtpa). The partners are also considering a plan to double production to 28 mtpa with an investment decision expected in 2026.

The exports will be targeting Asia and are expected to start a shift of Canada’s LNG exports from the United States to Asian customers. In addition to China, Japan’s Mitsubishi is expected to begin its first imports of LNG from this facility.

The LNG is being shipped via pipeline from the northeast reaches of British Columbia to the plant near Vancouver for processing and preparation for export. While it will be the first Canadian facility, it is expected that over the next few years, Canada will continue to develop its export capacities. Already, two smaller facilities, Woodfibre LNG and Cedar LNG, are under construction due to be completed in 2027 and 2028.

Canada is poised to become a significant supplier to Asia. It is expected to be a strong competitor to both the United States, which ships LNG from the Gulf Coast, and Qatar, which is completing a major expansion project for its LNG operations.