September 29, 2026 - Shell and its partners have made a final investment decision to expand the LNG Canada export terminal in Kitimat, British Columbia, doubling its planned production capacity from 14 million to 28 million tonnes of liquefied natural gas a year.

The decision moves Phase 2 from planning into execution. LNG Canada said the expansion will add two processing trains to the two already operating at Kitimat, along with another LNG storage tank, a condensate tank, a loading berth, and expanded utility and processing systems. The terminal began shipping LNG in June 2025, primarily to Asian markets.

The expansion also requires more natural gas to reach the coast. TC Energy confirmed that Phase 2 of its Coastal GasLink system will proceed following LNG Canada’s decision. Five new compressor stations and upgrades along the existing 670-kilometre route are expected to nearly double the pipeline’s current capacity of approximately 2.1 billion cubic feet per day. TC Energy expects pipeline construction to begin in early 2027 and the expanded system to enter service in the early 2030s.

LNG Canada will manage construction of the pipeline expansion under commercial agreements with Coastal GasLink. Coastal GasLink will remain the pipeline’s owner, operator and permit holder. The terminal partners are Shell, with a 40% interest; PETRONAS, 25%; PetroChina, 15%; Mitsubishi Corp., 15%; and Korea Gas Corp., or KOGAS, 5%. Each partner takes its proportionate share of the LNG produced.

Canada’s Major Projects Office has estimated that Phase 2 could attract C$33 billion in private-sector capital. That is a government project estimate, rather than a newly announced final construction cost. LNG Canada projects up to 4,000 jobs at peak terminal construction, while TC Energy estimates up to 2,100 people working on the pipeline expansion at its peak. LNG Canada expects to add about 90 full-time positions and 150 contractor roles in Kitimat once the expansion is complete.

The decision also enables an option for investment of up to C$1 billion by a partnership representing five First Nations neighboring the project. Under the arrangement, the investment would be made in an entity that will purchase the new LNG storage tank.

The coal-market connection is longer term. LNG Canada’s added supply is expected in the early 2030s, so it does not resolve today’s gas shortages or immediately change coal demand. Fuel prices will help determine how the additional LNG affects power generation once it reaches buyers. In its Coal Mid-Year Update 2026, the International Energy Agency said higher gas prices have encouraged some power systems with available coal capacity to generate more electricity from coal. The agency also said cheaper LNG could put renewed pressure on coal-fired generation if gas supplies recover.

For coal producers and power generators serving Asian markets, the expansion is a significant future supply development to watch. The investment decision is firm; its eventual effect on coal consumption will depend on when the new trains enter service, LNG prices, and the power-generation choices available in importing countries.