Canada’s ambitions to become a global energy powerhouse gained momentum just two months after LNG Canada shipped its first cargo from the Pacific Coast. The federal government has moved quickly to designate the expansion of LNG Canada as one of five national priority projects, placing it at the center of a new strategy to diversify energy exports and reinforce the country’s role in both conventional and cleaner energy markets.
LNG Canada at the Core of National Strategy
Prime Minister Mark Carney announced that LNG Canada Phase 2, located in Kitimat, British Columbia, will be the first project referred to the newly established Major Projects Office (MPO). This office was created to accelerate the approval and development of projects deemed to be of national significance. Under the new framework, priority projects will be subject to a single set of conditions, with approvals capped at a maximum of two years.
The government’s approach signals a recognition that LNG exports are vital to Canada’s energy and economic future. For years, the country has been almost entirely dependent on the United States as its primary export market. The development of LNG Canada, a joint venture led by Shell alongside Petronas, PetroChina, Mitsubishi, and Korea Gas Corporation (Kogas), offers Canada a direct link to Asia and Europe, diversifying its trade partners and reducing exposure to shifting U.S. trade policies.
Phase 2 of LNG Canada will double liquefied natural gas output to 28 million metric tons per year, positioning it as the second-largest LNG facility in the world. The project will not only strengthen Canada’s export portfolio but also attract billions in private investment, stimulate job creation, and contribute to long-term economic growth.
Balancing Growth and Sustainability
Federal leaders are emphasizing the environmental credentials of the project, framing LNG Canada as a symbol of Canada’s ability to deliver lower-carbon energy. According to the government, emissions from the expanded facility are projected to be 35 percent lower than the best-performing LNG projects globally and 60 percent lower than the global average.
“Leveraging Canada’s sustainable advantage, emissions are projected to be 35% lower than the world’s best-performing LNG facilities and 60% lower than the global average,” the Prime Minister’s office said in its announcement.
Tim Hodgson, Minister of Energy and Natural Resources, reinforced the government’s messaging that these projects are a cornerstone of Canada’s energy future. “At this pivotal moment, we promised Canadians we would deliver results, building Canada into an energy superpower and the strongest economy in the G7,” Hodgson said.
While the announcement focused heavily on LNG, the government also included other strategic developments in the MPO’s first slate of projects. These include a small modular nuclear reactor, a container terminal, and two mining initiatives aimed at expanding Canada’s copper production. Collectively, these projects highlight a broader energy diversification strategy designed to boost Canada’s competitiveness in both traditional and clean energy supply chains.
Industry and Provincial Reactions
Reaction from industry and provincial leaders has been largely supportive. Alberta Premier Danielle Smith praised the inclusion of LNG Canada on the MPO’s first list, calling it a long overdue recognition of the challenges that have slowed major projects in the past. “When I looked at the first five projects, I thought: ‘Finally — they get it,’ because it’s all the projects that have been difficult to build,” Smith said.
However, Smith also noted that pipelines were not part of the initial list, even though Alberta is actively seeking private backers for a new oil pipeline to move up to one million barrels per day from the province to British Columbia. Her comments reflect an ongoing tension between Ottawa’s focus on LNG and low-carbon energy, and Alberta’s priority of securing more egress for its oil production.
The Canadian Association of Petroleum Producers (CAPP) echoed Smith’s positive view of the LNG inclusion while voicing similar concerns over the absence of pipeline projects. Lisa Baiton, CAPP’s President and CEO, stressed the importance of LNG exports for both market diversification and national energy security.
“Building LNG export capacity and other oil and natural gas related projects are among the fastest ways to diversify Canada’s global customer base and increase our economic and energy sovereignty in the face of international economic uncertainty,” Baiton said. While acknowledging the omission of pipelines in the MPO’s first project list, CAPP emphasized it will continue to push for expanded market access and additional routes for Canadian oil and gas.
For many in the industry, LNG Canada Phase 2 represents a critical step toward positioning Canada as a reliable supplier of natural gas at a time when global markets are increasingly focused on both energy security and emissions reductions. With geopolitical uncertainty and shifting trade dynamics shaping the future of global energy flows, Canada’s ability to deliver LNG to Asia and Europe could help secure a stronger foothold for its hydrocarbons while supporting the transition to lower-carbon fuels.
