BC LNG progresses but questions remain

The Province’s LNG strategy has entered a critical new phase following the first export shipment from the Kitimat terminal at LNG Canada on June 30, 2025. Premier David Eby described the milestone as a historic moment for the province’s economic ambitions, highlighting job creation in the North and new revenue streams for public services. He affirmed that although talks are ongoing, no final decision has been made on a Phase 2 expansion of the project.

In recent days, the project’s initial phase has encountered operational setbacks, as Train 1 is running well below capacity due to technical issues with a gas turbine and a refrigerant processing unit. These problems have delayed ramp-up and prompted the diversion of at least one LNG tanker away from Kitimat, according to industry sources. As a result, Western Canada’s gas prices have remained depressed—it is widely reported that AECO hub prices remain low despite expectations that LNG Canada exports would reduce oversupply

Looking forward, structural growth and competition remain key uncertainties. A new design contract has been awarded to the Fluor–JGC joint venture to update the Front End Engineering and Design (FEED) for a potential Phase 2 expansion—intended to double the facility’s output capacity. While stakeholders remain optimistic, no final investment decision has yet been reached by LNG Canada or its joint venture partners. In parallel, rising construction costs for projects like Woodfibre LNG near Squamish and Cedar LNG—each facing engineering and permitting challenges—underscore the financial pressure on future LNG developments in British Columbia