LNG Canada's partners have sanctioned the Phase 2 expansion at the Kitimat, British Columbia, export terminal, the joint venture confirmed to The Globe and Mail, extending capacity at Canada's only operational Pacific-coast LNG facility beyond the two trains currently ramping up.

The decision covers a third liquefaction train built on the existing Douglas Channel footprint, the same site that has shipped commercial cargoes since 2025. Feedgas will travel the 670-kilometre Coastal GasLink pipeline operated by TC Energy, tying production from the Montney and Horn River basins into the terminal.

What does a third train change?

Phase 2 lifts the terminal's annual liquefaction capacity beyond the two-train Phase 1 design intent. Detailed engineering from the original three-train layout remains substantially complete, reducing execution risk relative to a greenfield third-train project. Engineering documents sized shared infrastructure — utility blocks, marine berths, storage — for downstream debottlenecking, so a third train plugs into systems built for it.

EPC procurement is expected to draw on the same British Columbian and Albertan industrial base that built the existing facility. The five equity holders — Shell plc, PETRONAS, PetroChina, Mitsubishi Corporation and Korea Gas Corporation — each carry direct stakes. The Haisla Nation holds partnership and benefit agreements covering the site. Phase 1 reached commercial production in 2025 following a development that began with the 2016 final investment decision. Phase 2 was carried at "in-assessment" status through the post-2022 commodity volatility that pressured capital discipline across partner portfolios.

The sanction also lands as the BC LNG cluster gathers critical mass. Woodfibre LNG is commissioning ahead of first cargoes from its Squamish facility. Cedar LNG is advancing toward a 2027 commercial in-service date from its floating terminal near Kitimat.

Why now?

Market signals support the timing:

• Asian spot LNG has held materially above the 2018-2021 average band since late 2021.
• European importers have layered long-term contracts onto term portfolios after the disruption of Russian pipeline gas.
• North American capacity additions at Sabine Pass, Corpus Christi Stage 3, Plaquemines, Rio Grande LNG and the in-progress Port Arthur and Golden Pass projects are tracking toward nameplate.
• Consultancy forecasts still flag a 2027-2030 demand wave that could outrun the sanctioned pipeline if buyers don't sign further U.S. Gulf Coast offtake.

Kitimat offers a structural shipping edge. Distance from Douglas Channel to North Asian regasification terminals is shorter than from the U.S. Gulf Coast, and the shorter voyage carries tangible benefits for European importers reporting under the Carbon Border Adjustment Mechanism and for Asian buyers operating with voluntary import emissions baselines.

What to watch

• Front-end engineering package and EPC award date for the third train.
• Sustained ramp metrics at the two existing trains against design nameplate.
• BC Oil and Gas Commission permits for the additional liquefaction infrastructure.
• Next offtake window for Phase 2 cargo allocation as uncontracted Phase 1 volumes come up for re-marketing.