Petronas has announced that its first LNG shipment from the large LNG Canada project is now expected to depart in July 2025, missing its initial target of late 2024. The delay is attributed to extreme winter conditions in British Columbia, which have slowed insulation work at the Kitimat facility, as well as prior labor shortages, according to Petronas Executive Vice President Datuk Adif Zulkifli.
LNG Canada, a joint venture involving Shell (40%), Petronas (25%), Mitsubishi Corp. (15%), Korea Gas Corp. (5%), and PetroChina (15%), will process 1.9 billion cubic feet of natural gas per day. This represents a significant portion of Canada’s gas production. Once fully operational, the project is expected to boost Canadian natural gas prices as more supply, which would have previously gone to the U.S., is redirected to Asian markets.
Michael Rose, CEO of Tourmaline Energy, Canada’s leading natural gas producer, has warned that LNG Canada’s launch will eliminate the long-standing price discount on Alberta’s AECO gas. Natural gas is currently trading at $4.14/MMBtu (+3.63%), and the industry expects further price increases as demand for LNG exports grows.
Despite the delay in Petronas’ project, the outlook for Canadian LNG remains positive. The U.S. is expanding its LNG capacity, and Canada is projected to export 36.2 million tons of LNG annually by 2040, according to Wood Mackenzie. However, Canada’s federal government has been cautious about LNG, recently closing the door on a potential supply deal with Germany.
Petronas President & Group CEO Tan Sri Tengku Muhammad Taufik emphasized that the company will continue to navigate any geopolitical challenges, including potential shifts in U.S. trade policy, by adhering to established pricing systems and fair trade practices.
Though the debut of LNG Canada has been delayed, once operational, it is expected to significantly impact North American gas flows. Investors are closely monitoring the project’s progress.
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