Insights 
VT 
Canada is poised to produce its first liquefied natural gas (LNG) from the LNG Canada site in Kitimat. This production offers Asian markets an alternative to sources in the U.S., Australia, Qatar, and Russia.
LNG Canada, situated in British Columbia, is the country’s largest LNG export project, with an investment of $40 billion. It is led by Shell and supported by partners such as PetroChina, Petronas, Mitsubishi, and KOGAS.
Facility Features
The facility will initially have two liquefaction trains, producing 14 million tonnes annually, with potential for future expansion. Its position on Canada’s west coast allows shorter shipping routes to Asia compared to the U.S. Gulf Coast terminals.
Notably, LNG Canada uses hydroelectric power, resulting in one of the lowest carbon intensity LNG facilities globally. Construction began in 2019, with exports anticipated by mid-2025.
Natural gas will be supplied via the Coastal GasLink pipeline from northeastern British Columbia. The project aims to boost the region’s economy and provide job opportunities for local and First Nations communities.
While facing some environmental challenges, LNG Canada is part of Canada’s strategy to become a trusted global LNG supplier, offering low-emission energy options amid energy security concerns.
Market Impacts
We’ve now reached the stage where LNG from Canada is no longer part of a long-term vision — it’s becoming a tangible supply option, particularly for importers across Asia who are seeking a more balanced portfolio. With construction nearing the final stretch and production expected next year, this development starts to shift the flow of forward contracts and regional basis spreads.
For traders like us, every alteration in supply geography translates into practical changes in pricing behaviour. The reduced voyage time from Kitimat to East Asia, especially when compared to Gulf Coast terminals, compresses shipping premiums and undermines the arbitrage opportunities that have dependably benefited certain shipping routes. This also begins to test how much value Asian buyers place on journey length when freight rates are volatile. Those with exposure to the Pacific shipping market may want to reconsider the weight they’ve given the Panama Canal constraints in their hedging models — this new Western Canadian route sidesteps those bottlenecks altogether.
What’s perhaps just as pivotal is the method of production. LNG Canada’s use of hydroelectric power quietly puts pressure on other LNG projects whose emissions profiles are more carbon intensive, particularly during times when buyers are becoming pickier about origin certificates and contractual sustainability clauses. Clean power doesn’t just help with public perception; it influences how offtake commitments are structured, especially in jurisdictions with stricter import carbon accounting.
Bentley touched on the environmental hurdles earlier, but what we’re seeing is more than just regulatory pressure — it’s a shift in preferred project structures. Investors and traders alike will probably need to revisit what risk premiums to build into projects relying on fossil-fuel-powered liquefaction. That doesn’t guesswork anymore — the Kitimat model gives comparables.
From a logistical point of view, the role of the pipeline — Coastal GasLink — firms up upstream gas demand in a province already conscious of production permits and strain on natural habitats. Cho’s involvement makes this corridor firm, but it could also trigger a clearer distinction in price between Canadian AECO and further-out delivery points like PG&E or Sumas. We can already see spreads reacting in certain weather-sensitive windows.
Disruptions — even short ones — on this new infrastructure will grab attention, especially if early exports are timed to coincide with winter drawdowns in Northeast Asia. The first cargoes won’t just be symbolic; they’ll set a tone for how resilient the infrastructure really is. Volatility around first loadings tend to be high, and liquidity in Kitimat-related indices is too shallow right now for comfort. Use that to hedge against unexpected divergence in prompt versus curve pricing.
What readers can take away from this is that pricing curves, particularly for JKM and West Coast North American hubs, are already quietly shifting. Not in sharp phases, but in slow, steady realignments. We are recalibrating forward exposures with that in mind. Clarity from infrastructure completion, and new sources of long-term Asian demand, makes short-term speculative positions riskier without quick trigger options.
So while this isn’t a sudden disruption, the timeline toward mid-2025 is now close enough that strategy can no longer be static. If the volumes move on time and the carbon footprint remains as clean as suggested, we’re likely to see re-rating of some peers. Not all of that is priced in.
