LNG Canada Expansion Takes Step Forward as BC, Ottawa Reach Agreement

Plans to expand Canada’s first liquified natural gas export terminal moved ahead on May 14 as Ottawa, British Columbia, and company LNG Canada announced an agreement on enhanced investment cooperation.

B.C. Premier David Eby, Energy Minister Tim Hodgson, and LNG Canada president Chris Cooper made the announcement from Vancouver.

Stakeholders now expect the company could make a final investment decision by the end of the year.

LNG Canada Phase 2 was referred to the federal Major Projects Office for steering last year. Phase 1 of the project, in Kitimat, B.C., came online in summer 2025 and exported Canada’s first shipments of liquified natural gas (LNG).

LNG Canada is a joint venture between multinationals Shell, Petronas, PetroChina, Mitsubishi Corporation, and Korea Gas.

The agreement on enhanced investment cooperation between the governments and LNG Canada was reached after the joint venture partners approved hundreds of millions of dollars in incremental funding for different phases of the project as it works toward a final investment decision.

Natural Resources Canada says any final investment decision “remains subject to the Joint Venture Partners independently satisfying all commercial, fiscal, regulatory and governance requirements.”

The department says the investment agreement has several core principles, including working closely with First Nations, creating jobs, and diversifying markets to better supply allies with LNG.

Hodgson has noted increased interest in Canadian LNG from foreign countries during his travels in the last year and the current oil and gas crunch, caused by the Iran war, is making Canadian supply increasingly attractive.

Hodgson called the recent development on LNG Canada an “exciting milestone” for development of Phase 2.

“This is a perfect example of the momentum Canada has right now when the federal government, the provincial government, and industry work together on common goals, to build Canada strong, to diversify trade and become a clean and conventional energy superpower,” Hodgson said during the press conference.

Eby called the agreement an “important vote of confidence in British Columbia,” and emphasized the scale of the joint venture’s investment in the project and its potential economic impact.

“Our reality as a country and as a province is that we have to stand on our own two feet and use our resources and our advantages to build up this province and this country for all Canadians,” he said.

Hodgson and Eby both touted the project’s potential for GDP growth, job creation, and trade diversification. Eby said the expansion could support up to 5,000 skilled trades positions and, if it proceeds to a final investment decision by year’s end, would represent the largest private-sector investment in Canadian history.

Some environmental groups have raised concerns about further LNG development in B.C. The B.C. Green Party calls for a pause on new LNG expansion until a comprehensive independent health review is completed.

Eby said the province is committed to keeping high environment standards in the development of major projects.

The Canadian Press contributed to this report.