LNG Canada export terminal in Kitimat, B.C., in 2025. The contractors will be embarking on a series of onsite and offsite work programs to gear up for a possible Phase 2 expansion.Aaron Whitfield/The Globe and Mail
Contractors for LNG Canada will be preparing the project’s site in British Columbia for a potential expansion that would double the export terminal’s capacity for producing liquefied natural gas.
Fluor Corp. of Irving, Tex., and JGC Corp. of Yokohama, Japan, served as the contractors for LNG Canada’s Phase 1 terminal in Kitimat in northwest B.C., which began operation last year. They will be embarking on a series of on-site and off-site work programs to gear up for a possible Phase 2 expansion.
Shell PLC and the other co-owners of LNG Canada are expected to make a final investment decision (FID) by the end of 2026 on whether to forge ahead with expansion plans.
“Any potential FID still remains subject to the joint venture participants independently satisfying all commercial, fiscal, regulatory and governance requirements,” LNG Canada spokesperson Paul Hagel said in an e-mail on Tuesday.
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LNG Canada became this country’s first export terminal for natural gas in liquid form when it started shipping to Asia in late June of 2025.
JGC Fluor BC LNG, a collaboration between JGC and Fluor, is the project’s engineering, procurement and construction contractor.
“We look forward to advancing the next phase of this world‑class project to help connect Canadian natural gas to global markets,” Pierre Bechelany, Fluor’s business group president of energy solutions, said in a statement.
LNG Canada’s Phase 1 has the capacity to export 14 million tonnes of the fuel a year, though the project could increase that figure to 15 million tonnes through operating efficiencies.
Under Phase 2, the terminal’s export capacity could double to as much as 30 million tonnes a year. Last month, LNG Canada and the federal government said in a joint statement that the project’s co-owners approved “hundreds of millions of dollars in incremental funding to help finalize critical work scopes to achieve a potential FID by the end of the year.”
Fluor said the work to be done in the months ahead was triggered by a “limited notice to proceed” from LNG Canada, with the goal to do early planning and have the site ready for an eventual construction of Phase 2.
London-based Shell has the largest stake in LNG Canada at 40 per cent, followed by Malaysia’s state-owned Petronas (25 per cent), Japan-based Mitsubishi (15 per cent), PetroChina (15 per cent) and South Korea’s Kogas (5 per cent).
Last September, Washington-based MidOcean Energy acquired a 20-per-cent interest in key Petronas assets in Canada, including natural gas operations in northeast B.C., and the Petronas stake in LNG Canada. Industry analysts say that transaction gave MidOcean what amounts to an indirect stake in LNG Canada’s first phase.
Export Development Canada is considering financing for an investor seeking to participate in Phase 1 and the prospective Phase 2. “EDC is working with an entity that has expressed interest in a potential acquisition of an indirect equity stake in the project,” the federal Crown corporation said in a statement.
Critics say climate and health effects are being ignored, including the effects of LNG Canada’s excessive flaring of natural gas at the Kitimat industrial site. Flaring involves the controlled burning of natural gas.
“It’s extremely substantial flaring,” Alex Walker, energy analytics program manager at non-profit Environmental Defence, said in an interview. “It’s going to take two to three years to fix.”
B.C., Ottawa reach pact to support LNG Canada’s expansion plans
In March, LNG Canada agreed to take the lead role in developing plans for the potential expansion of the Coastal GasLink pipeline, which transports natural gas from northeast B.C. to Kitimat.
Calgary-based TC Energy Corp. 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 asset manager KKR & Co. Inc.
Industry experts say it could cost roughly $6-billion to add five compressor stations to double capacity along Coastal GasLink’s 670-kilometre route in order to increase supplies of natural gas required for LNG Canada’s potential expansion.
The final cost of building the first phase of LNG Canada is expected to be $48.3-billion, including the $18-billion Kitimat terminal, Coastal GasLink and other infrastructure, as well as annual budgets for drilling in the North Montney region of northeast B.C.
Costs for Coastal GasLink were pegged at $6.2-billion in 2018, but subsequently surged to $14.5-billion.