LNG Canada phase two added to federal priority project list

KITIMAT, B.C. — The second phase of the LNG facility in Kitimat is one of the first projects to be considered by the federal government’s new Major Projects Office (MPO) for fast-tracking.

Prime Minister Mark Carney announced in a press release on Thursday, September 11th that the MPO will fast-track developments deemed in the ‘national interest’, including LNG Canada phase two, by streamlining approvals and financing, with a two-year maximum review period.

“With the first in a series of new projects, we will build big, build now and build Canada strong,” Carney said.

If approved, phase two would double LNG Canada’s liquefied natural gas (LNG) production in Kitimat, making it the second-largest LNG facility in the world. The federal government said the expansion will attract investment, create jobs and supply lower-carbon energy to global markets.

The government also said carbon emissions are “projected to be 35 per cent lower than the world’s best-performing LNG facilities and 60 per cent lower than the global average.”

However, critics warn Canadians will pay, both financially and environmentally. Andy Hira, chair of political science at Simon Fraser University and lead researcher with the school’s Clean Energy Research Group, said Canada is uncompetitive in the LNG market compared to major producers like the U.S., Iran, Qatar and Saudi Arabia.

“Canadian LNG prices are also more expensive for buyers in the E.U., where it is cheaper to purchase from border countries such as Norway, Russia, Algeria and Qatar,” Hira said.

“Existing oil and gas assets are already not delivering net-positive economic growth, so any amount of new public funding is too much.”

Aly Hyder Ali, oil and gas program manager at Environmental Defence, said, “Nation building should secure Canada’s future, not tie us to the polluting past.”

“Canadians will pay twice for this: first through subsidies, and again through the rising cost of the climate crisis.”

Chris Severson-Baker, executive director of the Pembina Institute, said financing for LNG Canada’s expansion should come from the private sector. 

“Economic competitiveness means not propping up industries or sectors that can’t stand on their own,” he said. 

At the same time, he welcomed the government’s focus on cleaner economic growth, saying: “A strong, resilient and secure Canadian economy will be built on sectors aligned with low-carbon economic growth.”

According to a 2023 report from the Pembina Institute, phase two alone could emit 6.8 million tonnes of greenhouse gases annually, equivalent to the emissions from burning 7.5 billion tonnes of coal.

The announcement comes just months after the facility shipped its first cargo of LNG to Asia, following the start of production in late June.

In August, Fluor and JGC were awarded the contract to update front-end engineering and design plans for the expansion. 

A final investment decision has not yet been made by the project’s owners: Shell, Petronas, PetroChina, Mitsubishi and KOGAS.