Canada might only have an 18-month window to eliminate barriers, drive investment and fill the global need for liquefied natural gas — or risk having investors turn elsewhere.
That’s what CEO of Petronas Energy Canada Ltd. Mark Fitzgerald told the Greater Vancouver Board of Trade last month. He also called on Prime Minister Mark Carney to eliminate the uncertainty facing the sector.
Petronas, through its entity North Montney LNG LP, owns 25 per cent of LNG Canada Development Inc., a five-partner joint venture with an LNG plant in Kitimat — the country’s first LNG project of this magnitude.
The partners, which include Shell Canada Energy (40 per cent) and PetroChina Canada Ltd. (15 per cent), made a final investment decision in 2018 on Phase 1 of the project, which took roughly six years to build.
It represented a total investment of $40 billion, including the $18 billion LNG plant and the $14.5 billion Coastal GasLink Pipeline operated by TC Energy Corp. that runs 670 kilometres from Dawson Creek to Kitimat.
In April, the project welcomed its first LNG carrier ship. The facility is expected to begin operating in the next few weeks, said Fitzgerald.
Phase 1 will export around 1.8 billion cubic feet of LNG per day, he said. This is small compared to the U.S. Gulf Coast, which exports around 14 billion cubic feet per day.
According to Fitzgerald, it takes 20 days for a shipment of LNG to leave the U.S. Gulf Coast, go through the Panama Canal and cross into Eastern Asia.
That time is cut in half for shipments from Canada’s West Coast, he said, something that should give the country a competitive advantage. But stringent policies and delays are clouding that opportunity, he said.
“When we go to the board of Petronas to talk about investment in Canada, the very first thing that’s always [said] is: Canada does not want energy investment,” he said.
Canada has been clear on reducing energy supply, decarbonization and shrinking their global role in energy supply, said Fitzgerald. Nevertheless, he said Carney remarking that Canada has an opportunity to drive energy security globally with conventional energy is encouraging.
Regulatory requirements and independent assessments need to be streamlined, because delays drive projects away, said Fitzgerald.
“Canada’s risk premium in the boardrooms has gone up the last three years. As a Canadian, that’s embarrassing to me,” he said. “It’s the actions that follow that will attract the investment.… If the investment doesn’t come to Canada, it will go to Alaska.”
Western Canada has two major advantages: Its proximity to Asia, and its Montney formation, which is the second-largest natural gas basin in North America in proven reserves, according to Shell’s 2025 LNG Outlook.
Alaska has the same proximity advantage, and Alaska LNG — a $63 billion pipeline and LNG project being advanced by the state-owned Alaska Gasline Development Corp. — has full U.S. federal and state backing.
In January, U.S. President Donald Trump signed an executive order to prioritize the project and land customers in Japan and South Korea for Alaskan gas.
If it went ahead, LNG Canada’s Phase 2 would enter a market characterized by increasing saturation, global economic uncertainty and growing competition from Alaskan LNG, said Werner Antweiler, an associate professor at the University of British Columbia’s Sauder School of Business.
In an October 2024 World Energy Outlook, the International Energy Agency wrote that existing LNG export capacity and new capacity under construction is sufficient to meet projected demand … until 2040,” under a stated policy scenario.
Haisla Nation Chief Crystal Smith told BIV that previous outlooks have proven wrong in the past.
Population growth in regions like Asia and Africa will require cleaner and more efficient energy sources, said Smith, adding that this is something Indigenous communities can support.
If Canada were to double its current LNG production and export to Asia to replace coal power, global emissions could drop by 630 million tonnes annually, the equivalent of removing 137 million cars from the road, according to a recent Fraser Institute Canadian LNG export study.
In the U.S. Gulf alone, projects like Plaquemines LNG Phase 1 in Louisiana and Corpus Christi Stage 3 in Texas started production in December. Other projects like Golden Pass LNG Phase 2 in Texas and Plaquemines Phase 2, which are expected to come online over the next two years, would add to this saturation, said Antweiler in an email response.
LNG Canada Phase 2 would also be competing with Ksi Lisims LNG, a project north of Prince Rupert that is nearing an investment decision, he said. Construction of the project’s pipeline, the Prince Rupert Gas Transmission, started in August 2024.
If built, Ksi Lisims LNG will have a capacity of 12 million tonnes of LNG per year, according to the project.
A Phase 2 expansion of LNG Canada would double the current facility’s capacity.
A timeline for a final investment decision has not been made, according to an LNG Canada spokesperson, adding that the joint venture is exploring pathways for a potential expansion.
A final investment decision will take into account competitiveness and affordability, LNG Canada said.
Smith said the Haisla Nation is very supportive of Phase 2, and is supported by the First Nations Natural Gas Alliance — a collective of First Nations who participate in the development of B.C. LNG. Smith is chair of the alliance.
—With files from Glen Korstrom and Nelson Bennett
