Liquefied natural gas tanker Wudang fills up at an LNG Canada facility in Kitimat, B.C., in November, 2025.ETHAN CAIRNS/The Canadian Press
LNG Canada has agreed to take the lead role on the potential expansion of the Coastal GasLink pipeline across northern British Columbia, a move designed to spur construction of two major projects.
Shell PLC-led SHEL-N LNG Canada is expected to make a final investment decision by the end of 2026 on whether to proceed with its own Phase 2 expansion, which would double capacity for production of liquefied natural gas at the export terminal in Kitimat, B.C.
If LNG Canada forges ahead with its Phase 2 plan for the Kitimat terminal, it will require Coastal GasLink to double pipeline capacity.
TC Energy Corp. TRP-T operates the existing Coastal GasLink project that transports natural gas from northeast B.C. to Kitimat.
On Wednesday, Calgary-based TC said Coastal GasLink (CGL) has signed commercial agreements with LNG Canada, which will take responsibility for managing front-end engineering and design for increasing the pipeline’s capacity.
“Under the agreements, LNG Canada will lead project construction as CGL Phase 2 execution manager and CGL will provide LNG Canada technical advisory services,” TC said in a statement.
“The commercial structure includes limits on CGL’s capital commitments and overall liability for construction cost and schedule risks.”
Industry experts say it could cost roughly $6-billion to add five compressor stations to double capacity along Coastal GasLink’s 670-kilometre route.
“Doubling the transmission of natural gas through the existing pipeline will help further strengthen Canada’s role as a reliable supplier to global LNG markets,” TC chief executive officer François Poirier said in a statement.
LNG Canada started shipping the fuel to Asia from Kitimat last June.
Cost overruns dogged Coastal GasLink, which cost $14.5-billion to build, compared with a previous price tag of $6.2-billion in 2018, when construction began.
Although LNG Canada will shepherd the pipeline expansion plan, Coastal GasLink will still be the permit holder for future pipeline facilities.
A group of Wet’suwet’en Nation hereditary chiefs has led a campaign that opposes Coastal GasLink. In 2020, demonstrators staged rail and highway blockades across the country in support of the hereditary chiefs’ position.
Climate activists say the focus on fossil fuels such as LNG ends up delaying the global transition to renewable energy.
But Prime Minister Mark Carney, as part of his quest to reduce economic dependence on the United States, announced last September that LNG Canada’s Phase 2 terminal expansion plan made the list of major projects of national interest to be considered for fast-tracking.
TC operates Coastal GasLink and owns 35 per cent of the pipeline. In 2020, TC sold a 65-per-cent stake to Alberta Investment Management Corp. and KKR & Co. Inc.
TC has agreed to set aside a 10-per-cent interest in the contentious pipeline for a planned equity sale to as many as 20 elected First Nation councils along the B.C. route.
Qatar, the world’s second-largest LNG exporter after the U.S. last year, halted its production in early March after the U.S. and Israel began assaults on Iran on Feb. 28, triggering the virtual shutdown of the Strait of Hormuz.
Before the war in Iran, about one-fifth of the world’s oil and LNG supplies passed through the Strait of Hormuz.
Iran has launched multiple strikes against the Ras Laffan LNG hub in Qatar, inflicting heavy damage in a bombardment last week.
“Increasing LNG exports presents an extraordinary opportunity to transform our economy and establish our country as the number one LNG exporter to Asia,” Mr. Poirier said.
The U.S. has been the largest exporter of LNG in the world for the past three years. Eight U.S. LNG export terminals have opened since 2016, and another four are slated to be exporting by 2028.
By contrast, LNG Canada became this country’s first export terminal for natural gas in liquid form when it started shipping to Asia last June.
London-based Shell has the largest stake in LNG Canada at 40 per cent, followed by Malaysia’s state-owned Petronas PNAGF (25 per cent), Japan-based Mitsubishi MSBHF (15 per cent), PetroChina PTRCY (15 per cent) and South Korea’s Kogas (5 per cent).