Key Takeaways
- LNG Canada Phase 1 reached commercial operations in early 2026, giving Canada its first LNG export capacity of approximately 14 million tonnes per year.
- The project is jointly owned by Shell (40%), Petronas (25%), PetroChina (15%), Mitsubishi (15%), and Korea Gas Corporation (5%).
- Coastal GasLink pipeline, a 670km pipeline from Dawson Creek to Kitimat, delivers approximately 2.1 billion cubic feet per day to the terminal.
- Asian LNG demand, particularly from Japan and South Korea seeking to diversify away from Russian supply, supports long-term offtake.
- BC LNG prices are now linked to Asian spot markets (JKM) rather than North American AECO, creating a new pricing dynamic for producers.
When LNG Canada reached commercial operations in early 2026, it marked more than the completion of Canada’s largest-ever private sector infrastructure project. It represented a fundamental shift in how Canadian natural gas is priced and who buys it. For the first time, Canadian natural gas producers have direct access to Asian markets, where prices have historically been significantly higher than North American benchmarks.
The Project: Scope and Ownership
LNG Canada’s Phase 1 facility at Kitimat, British Columbia consists of two liquefaction trains capable of processing approximately 14 million tonnes per year of LNG roughly equivalent to 1.8 billion cubic feet of natural gas per day. The project is majority-owned by Shell (40%), with Petronas, PetroChina, Mitsubishi, and Korea Gas Corporation holding the remaining interests.
The 670-kilometre Coastal GasLink pipeline, owned by TC Energy, delivers natural gas from the Montney and other northeastern B.C. formations to the Kitimat terminal. At peak throughput, Coastal GasLink moves approximately 2.1 billion cubic feet per day a volume that meaningfully tightens the B.C. natural gas market.
Pricing Revolution for Canadian Producers
The most significant consequence of LNG Canada for Canadian natural gas producers is the pricing shift. Gas delivered to the Kitimat terminal is effectively priced on the Japan-Korea Marker (JKM) the Asian LNG spot benchmark rather than AECO. During periods of high Asian LNG demand, JKM prices can be 50-100% above Henry Hub and dramatically above AECO.
“LNG Canada changes the addressable market for Canadian natural gas fundamentally. We are no longer just a North American gas producer we are now connected to the largest energy market in the world.” Tourmaline Oil CEO Michael Rose, Q1 2026 Earnings Call
Which Producers Benefit Most?
Producers with Montney and Horn River Basin acreage in northeastern B.C. are best positioned to benefit from LNG Canada. Tourmaline Oil (TSX: TOU) is the largest Canadian natural gas producer and has signed a significant long-term supply agreement with Shell for LNG Canada feedgas. ARC Resources (TSX: ARX), with its Attachie Montney development, is similarly positioned. For these companies, LNG Canada creates a structural revenue uplift that persists for decades the project’s offtake agreements run 20+ years.