LNG Canada Produces First Liquefied Natural Gas (LNG) for Export

TOP IMAGE BY HERMES RIVERA

The LNG Canada project, led by Shell has produced the first liquefied natural gas (LNG) for export at its facility in Kitimat, British Columbia, according to Reuters.

“At 4 a.m. local time LNG Canada started producing its first LNG,” a source familiar with the startup of the plant told Reuters. 

A North American First

The facility is the first large-scale Canadian LNG project to start production. It is also the first major facility in North America with direct access to the Pacific Ocean – significantly cutting sail time to Asian markets.

Once fully operational, the facility is expected to export up to 14 million metric tonnes per annum (mtpa) of LNG, according to company projections.

The current production comes from Train 1, which has a nameplate capacity of 5.6 mtpa. However, due to issues with one of its lines, Train 1 is temporarily operating at half capacity, one of the sources told Reuters.

The first export cargo is expected to ship by early July, the two sources stated.

The LNG Canada is a joint venture between Shell Plc SHEL.L, Petronas PGAS.KL, Petro China 601857.SS, Mitsubishi Corporation 8058.T , and Kogas KVGG.LJ.

U.S. Exports Likely to Decline

Although LNG Canada has not yet responded Reuters, the development marks a turning point for Canada’s natural gas sector.

Once the facility becomes fully operational, the project is expected to reduce Canadian gas exports to the United States, according to traders.

This is because Canadian energy companies will gain access to alternative markets. At present, the United States remains Canada’s only outlet for natural gas.

In 2024, Canada exported 8.6 billion cubic feet per day (bcfd) of gas to the U.S., up from 8.0 bcfd in 2023, according to data from the U.S. Energy Information Administration. This compares to a five-year average of 7.5 bcfd from 2018 to 2022, with a record high of 10.4 bcfd in 2002.