LNG Canada starts early work on Phase 2 expansion ahead of FID

LNG Canada’s joint‑venture partners have issued a limited notice to proceed (LNTP) for early work tied to the proposed Phase 2 expansion of the LNG export plant in Kitimat, BC.

The LNTP authorizes JGC Fluor BC LNG II Joint Venture (JFJV2)—a 50-50 partnership of Fluor Canada Ltd. and JGC Constructors (No2) BC Ltd.—to begin planning and advance key activities ahead of a potential final investment decision (FID).

“The LNTP enables us to initiate early planning and move forward with key activities to support a proposed Phase 2 final investment decision by LNG Canada,” said Pierre Bechelany, Fluor’s business group president of energy solutions, in a June 1 release.

JFJV delivered Phase 1 of LNG Canada, providing engineering, procurement, fabrication management, construction, and commissioning services. In 2025, the joint venture completed two processing trains and associated infrastructure including storage tanks, rail yard, water‑treatment facilities, flare systems, and the marine terminal.

The plant, located in the traditional territory of the Haisla Nation, began LNG exports from Train 1 in mid‑2025 and started production from Train 2 by November, bringing initial capacity to 14 million tonnes/year. Phase 2 is designed to double output.

Progress toward FID

The LNTP follows an investment cooperation agreement reached last month among the federal government, British Columbia, and LNG Canada aimed at clearing remaining hurdles to FID.

That agreement followed approval by the project’s joint‑venture partners of hundreds of millions of dollars in additional funding for engineering, long‑lead procurement, First Nations agreements, commercial finalization across pipeline and supply chain, and continued construction at the marine offloading terminal.

The cooperation pact targets four areas: collaboration with First Nations, strengthening Canada’s investment climate, securing jobs and training, and diversifying export markets through expanded LNG supply. A Phase 2 sanction could move Canada into the world’s top five LNG exporters.

LNG Canada is a joint venture of Shell (40%), PETRONAS (25%), PetroChina (15%), Mitsubishi Corp. (15%), and KOGAS (5%).