Shell Led LNG Canada Begins Production Marking New Era in Gas Exports

LNG Canada, a joint venture project, led by Shell plc SHEL has officially entered the global LNG export market with its facility in Kitimat, British Columbia, producing the first batch of liquefied natural gas (“LNG”). While the first cargo is yet to be loaded, the milestone marks a significant breakthrough for Canada’s energy ambitions.

The project which primarily targets Asia for its exports, comes amid rising concerns over global gas disruptions due to Israel-Iran conflict tensions in the Middle East.

The facility is yet to load the first LNG export cargo but it is on schedule to do so by middle of 2025.

Taking a Look at the LNG Canada Joint Venture Project

The LNG Canada project is a joint venture comprising Shell (40%), Malaysia’s Petronas (25%), Mitsubishi Corporation (15%), PetroChina (15%) and Korea Gas Corporation (5%). It stands as the first large-scale LNG project in Canada to begin production and the first major LNG facility in North America with direct access to the Pacific Coast, offering a faster shipping route to Asia’s markets compared with terminals on the U.S. Gulf Coast. Once fully operational, the facility is expected to export 14 million metric tons of LNG annually. Shell and its partners are also planning to make a final investment decision next year to potentially double this capacity.

Shifting Trade Routes and Energy Strategies

With LNG Canada online, Canada is poised to divert a portion of natural gas exports away from the United States, currently its sole international customer. In 2024, Canada piped around 8.6 billion cubic feet per day to the United States, but traders anticipate a dip as new LNG routes come into play. Two more projects, Woodfibre LNG and Cedar LNG, are also under construction, aiming for completion between 2027 and 2028.

Key Pacific LNG Exporter

With the Gaslog Glasgow tanker approaching Kitimat for its maiden LNG load, the stage is set for Canada’s emergence as a key Pacific exporter. For a country long reliant on U.S. pipelines, the launch of LNG Canada reshapes its energy future, unlocking access to global markets and fortifying energy security at a time of global uncertainty.

SHEL’s Zacks Rank & Key Picks

London-based Shell is one of the primary oil supermajors, a group of U.S. and Europe-based big energy multinationals with operations that span almost every corner of the globe. Currently, SHEL has a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like BKV Corporation BKV, Subsea 7 S.A. SUBCY and Oceaneering International, Inc. OII. While BKV and Subsea 7 currently sport a Zacks Rank #1 (Strong Buy) each, Oceaneering carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BKV Corporation is an energy company that produces natural gas from its owned and operated upstream businesses. The Zacks Consensus Estimate for BKV’s 2025 earnings indicates 338.18% year-over-year growth.

Subsea 7 operates as an engineering, construction and services contractor to the offshore energy industry worldwide. The Zacks Consensus Estimate for SUBCY’s 2025 earnings indicates 95.52% year-over-year growth.

Houston, TX-based Oceaneering International is one of the leading suppliers of offshore equipment and technology solutions to the energy industry. The Zacks Consensus Estimate for OII’s 2025 earnings indicates 57.02% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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