Canada ships first LNG export cargo from Pacific coast

Time of India

01-07-2025

Canada's first-ever LNG export cargo has been shipped from the country's Pacific Coast en route to Asia, a spokesperson for the Shell-led LNG Canada said on Monday. The cargo was loaded onto the tanker Gaslog Glasgow from LNG Canada's site in Kitimat, British Columbia, just over a week after the facility confirmed first production and became the first large-scale commercial LNG operation in the country.
LNG Canada is the first major LNG facility in North America with direct access to the Pacific Coast. It starts at a time when trade tensions with the United States have heightened Canada's desire to diversify its export markets. "This is something Canada really needs right now," LNG Canada CEO Chris Cooper said in an interview, pointing to those trade tensions.
The LNG Canada project, which is a joint venture between
Shell Plc
, Petronas, PetroChina, Mitsubishi Corp and Kogas, cost approximately CDN$40 billion (US$29.4 billion) to construct and has been billed as the largest private-sector investment in Canadian history.
When fully ramped up, it will have the capacity to export 14 million metric tonnes of LNG per year.
Shell and its partners are working towards reaching a final investment decision next year for doubling the project's capacity, the chief of Shell's gas business Cedric Cremers told Reuters.
Canada is the world's fifth-largest producer and fourth-largest exporter of natural gas, but until now virtually all of those exports have gone to the United States.
LNG Canada offers the country's natural gas producers access to energy-hungry Asian markets for the first time. Its Pacific coast location offers a direct shipping route to Asia without needing to transit the Panama Canal, something project partners hope will give Canadian LNG an advantage against US competitors whose facilities are located on the other side of the continent along the Gulf coast.
LNG Canada also has a supply cost advantage. Prices for
Canadian natural gas
— which will be shipped to LNG Canada from the shale fields of northeast British Columbia via the Coastal Gaslink pipeline — currently trade at less than half the price of the US Henry Hub benchmark.
"West coast LNG in Canada competes exceptionally well against anything being developed in the United States," Petronas Canada CEO
Mark Fitzgerald
said at a conference in Calgary in June.
The startup of LNG Canada — which was first proposed in 2012 — comes almost 10 years after the United States first began exporting LNG from the lower 48 states. The United States has since become the world's largest LNG exporter, leaving many in Canada's energy sector to say that their country has been too slow to develop its own industry.
But Canada has additional LNG projects waiting in the wings. Two smaller Pacific coast LNG facilities — the Cedar LNG and Woodfibre LNG projects — are currently under construction, and LNG Canada itself is considering a second-phase expansion of the project, which would double the facility's capacity.
While Canadian LNG does have certain beneficial cost elements, it also has negatives, said RJ Johnston, incoming director of energy and natural resource policy at the University of Calgary's School of Public Policy.
Constructing new Canadian LNG facilities and pipelines along British Columbia's remote northern coast is more challenging and expensive than along the US Gulf, where the infrastructure to serve the LNG sector is already developed, he said.
Ed Kallio, executive advisor for data analytics and forecasting firm Incorrys, said the business case for expanding Canada's LNG production is weakened by
greenhouse gas regulations
that US producers don't face.
"The major risk for future LNG development in Canada is the price risk for (clean) electricity to power these processes," he said.