Shell-led LNG Canada could approve its Phase 2 expansion by early October, according to Reuters sources familiar with the joint venture's timetable. The decision would sanction a second liquefaction train at the Kitimat, British Columbia, export terminal, which reached commercial operations on its first 14 mtpa train in mid-2024. Reuters did not identify the sources, who spoke on condition of anonymity because the talks remain private.

Why does the timing matter?

LNG Canada's first train began commercial operations in 2024, anchoring northwestern British Columbia as Canada's first large-scale LNG export facility. A second train has been under study since the original final investment decision and would effectively double the facility's nameplate capacity. The project is operated by Shell plc and partnered with Petronas, PetroChina, Mitsubishi Corporation and Korea Gas Corporation (KOGAS).

Reuters reported that the early-October window suggests commercial and engineering milestones have cleared ahead of formal sanction. The joint venture has not publicly confirmed the schedule. Sources indicated the timing has firmed in recent weeks as partners aligned on cost, offtake and contractor packages.

What would Phase 2 add?

A second train would extend offtake from the Montney and Horn River basins of northeastern British Columbia, which currently supply the first train via the Coastal GasLink pipeline. Industry analysts have long treated Phase 2 as a matter of timing rather than viability, given the project's existing infrastructure, anchor tenure with Asian offtakers, and the cost advantages of brownfield expansion.

The partners have framed a second train as a way to monetize remaining discovered gas resources in the Western Canadian Sedimentary Basin. Additional processing and pipeline capacity would be required upstream, and producers in the Montney have publicly flagged Phase 2 as a demand anchor for the second half of the decade.

What is the watch item?

The early-October target is a Reuters-cited timeline, not a company confirmation. Shell and its partners have not commented publicly on the sanctioning schedule, and LNG Canada has historically declined to preview FID dates until partners are ready to commit. Markets will look to:

• A formal FID announcement from LNG Canada or its operator
• Disclosure of Phase 2 capacity, capex envelope and EPC contractor selection
• Associated upstream offtake agreements with Montney and Horn River producers
• BC Hydro industrial electricity tariff developments affecting operating cost assumptions
• Any federal or provincial policy signals on LNG expansion that could accelerate or delay a final investment decision

An October sanction would mark the largest Canadian energy infrastructure commitment since the original LNG Canada FID in October 2018, which sized Phase 1 at roughly CAD$40 billion and ranks among the largest private-sector investments in Canadian history.