Shell to Double Production Capacity at LNG Canada — Update

By Adam Whittaker

British energy major Shell said it would double production capacity at its LNG Canada facility in British Columbia as it bets on growing gas demand in Asia.

Shell said Tuesday that it would build two additional liquefaction plants to double production capacity to 28 million metric tons a year.

The multibillion dollar investment in the Pacific coast facility will enable Shell to sell more gas to Asia, where growing populations and power hungry data centers are fueling rising demand.

The investment is another boost for Canada, where Prime Minister Mark Carney has sought to establish the country more prominently as an energy superpower. Despite being rich in resources, regulations had hampered the country's oil and gas sector's ability to export. Now, the government is pushing to simplify the permitting process for such infrastructure and is introducing investment incentives.

Globally, Shell projects demand for LNG to increase to nearly 700 million tons a year by 2050, a 65% increase on 2025 levels.

A spate of new projects in the U.S. and around the globe had fueled fears of an impending supply glut. However, the conflict in the Middle East has changed the equation over the near term. The near closure of the Strait of Hormuz and damage to LNG facilities in the Gulf has likely pushed back concerns of any oversupplied market.

Liquefaction plants cool natural gas down to around minus 162 degrees Celsius, which shrinks its volume by around 600 times and turns it into a liquid. It is then shipped around the world and then turned back into gas at import terminals.

The fuel is cleaner than coal and has energy security advantages over piped gas. Europe has increasingly turned to shipments of American LNG after shunning piped gas from Russia following the country's full-scale invasion of Ukraine in 2022.

Shell owns a 40% stake in LNG Canada and will receive nearly 6 million tons a year of additional LNG from the expansion, it said. The first cargo from LNG Canada departed in June 2025, and Shell said it expects the commercial operations at the new facilities to commence in the early 2030s.

Other partners include Petronas, PetroChina, Mitsubishi Corporation and Korea Gas Corporation.

Write to Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires

September 29, 2026 04:19 ET (08:19 GMT)