Prime Minister Mark Carney has announced federal government support for Phase 2 of the LNG Canada project in British Columbia, clearing the political runway for the proposed expansion of the country's first large-scale liquefied natural gas export facility.

The announcement concerns the Kitimat, B.C., terminal on the province's northwest coast, where Phase 1 of LNG Canada — a joint venture led by Shell plc with partners Petronas, PetroChina, Mitsubishi and Korea Gas Corporation — shipped its first cargo in June 2025. Phase 1 comprises two liquefaction trains with a nameplate capacity of 14 million tonnes per annum (mtpa), roughly 1.9 bcfd of feed gas.

Phase 2 would add a third train of approximately 6.5 mtpa, lifting site capacity toward 20 mtpa and pulling additional Montney and Duvernay gas volumes westward through Coastal GasLink, the 670-km pipeline that feeds the facility from northeast British Columbia and Alberta.

Carney made the announcement in British Columbia, framing the expansion as part of the federal government's push to accelerate major resource projects and diversify Canadian energy exports toward Asian markets. No final investment decision (FID) for Phase 2 has been announced by the venture partners themselves, and readers should treat the timeline for sanction as appraisal-stage until the JV confirms capital commitments.

The federal announcement follows months of signals from the partnership. LNG Canada's shareholders have studied a third train since startup of the first phase, weighing gas supply economics, liquefaction contractor costs and EPC contractor availability against the demand outlook in Japan, Korea and China.

For the basin math: a Phase 2 sanction at 6.5 mtpa would require roughly 0.9 bcfd of incremental feed gas, a volume that Montney producers — Tourmaline Oil, ARC Resources, Ovintiv and others — can supply without straining takeaway on the Coastal GasLink corridor, assuming the pipeline's own expansion proceeds in step.

BC Premier David Eby's government has separately supported the project's permitting path, and the province's regulatory framework for LNG exports remains among the most developed in Canada.

The watch items from here: the formal FID from the LNG Canada joint venture, the scope and timing of any Coastal GasLink expansion filing with the Canada Energy Regulator, and the award of EPC contracts for Train 3 — the signal that capital has truly moved from political announcement to sanctioned project.