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Shell Canada Energy, an affiliate of Shell plc, announced a final investment decision on LNG Canada Phase 2, which will double production capacity at the facility in Kitimat, British Columbia.
"LNG Canada is a core part of our Integrated Gas portfolio, helping to supply LNG to customers in Asia at a time when diversity of energy supplies and energy security are increasingly important,” said Cederic Cremers, Shell’s Integrated Gas President. “Phase 2 supports Shell’s strategic objective to be the world’s leading integrated gas and LNG business by connecting Canadian resources with Shell’s global LNG portfolio, trading capability and customer reach.”
Phase 2 will add two LNG processing units, known as trains, increasing LNG Canada’s total production capacity from 14 million tonnes per annum (mtpa) to 28 mtpa. Shell has a 40% interest in LNG Canada and will receive nearly 6 mtpa of additional LNG from the expansion. Commercial operations are expected to begin in the early 2030s.
The investment is consistent with Shell's disciplined capital allocation framework and is expected to generate double-digit returns while supporting long-term cash flow growth.
The facility in Kitimat is positioned to supply cost-competitive gas to Asian markets, where demand for LNG is expected to increase significantly. According to Shell's LNG Outlook 2026, global LNG demand is expected to rise by around 60% by 2040 and around 65% by 2050, driven by growing energy demand and the need for secure, flexible and reliable energy supplies.
Liquefied natural gas (LNG)
- Global demand for LNG is expected to increase from 422 mtpa in 2025 to nearly 700 mtpa by 2050, an increase of around 65%. To meet the growing demand, significant additional investment will be needed in new LNG liquefaction plants – such as LNG Canada Phase 2 – through the 2030s and 2040s.
- Globally, on average, the life-cycle greenhouse gas (GHG) emissions intensity of electricity produced from LNG is around 40% lower than for electricity produced from coal, according to the International Energy Agency (IEA).
Shell in Canada
Shell Canada is an integrated energy company with all of Shell’s global businesses represented, including Upstream, Integrated Gas, Downstream, and Renewables and Energy Solutions. That means we do everything from exploration, gas production, refining and manufacturing, to providing fuels and developing energy solutions for our customers.
In the third quarter of 2026, Shell completed its acquisition of ARC Resources Ltd., an energy company based in British Columbia and Alberta, Canada, following all required shareholder, court and regulatory approvals.
Shell’s net carbon intensity and net-zero emissions target
In this announcement we may refer to Shell’s “net carbon intensity” (NCI), which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell’s NCI also includes the emissions associated with the production and use of energy products produced by others which Shell purchases for resale. Shell only controls its own emissions. The use of the terms Shell’s “net carbon intensity” or NCI is for convenience only and not intended to suggest these emissions are those of Shell plc or its subsidiaries.
Shell’s operating plan and outlook are forecasted for a three-year period and ten-year period, respectively, and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next three and ten years. Accordingly, the outlook reflects our combined Scope 1 and 2 target, NCI target and our oil products ambition over the next ten years. However, Shell’s operating plan and outlook cannot reflect our 2050 net-zero emissions target, as this target is outside our planning period. Such future operating plans and outlooks could include changes to our portfolio, efficiency improvements and the use of carbon capture and storage and carbon credits. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans and outlooks to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.
The information provided above regarding Shell’s NCI and net zero emissions target are not intended, nor should they be construed as introducing, suggesting or making any claim, target or representation thereof other than what is included in the announcement.
Note: This story has not been edited by The Polymerupdate Editorial team and is auto-generated from a syndicated feed.
