The Shell-led LNG Canada facility has produced its first LNG for export in Kitimat, British Columbia, a spokesperson for the project confirmed on Sunday.
The milestone comes in advance of the facility loading its first LNG export cargo, which LNG Canada said it remains on track to do by the middle of this year.
The facility is the first large-scale Canadian LNG project to begin production and also the first major LNG facility in North America with direct access to the Pacific coast, significantly reducing sail time to Asian markets when compared to U.S. Gulf coast facilities.
When fully operational it will have a capacity to export 14 million metric tonnes per annum (mtpa), according to company statements.
Two people familiar with the startup of the plant told Reuters it began producing LNG at 4 a.m. local time. The people said the super-chilled gas is being produced from the facility's Train 1, which has a capacity of 5.6 mtpa.
Only a portion of the processing plant is operating, according to the two people. Train 1 has had difficulties with one of its lines and will only produce at half its capacity until the problem is solved, one of the sources said.
LNG tanker Gaslog Glasgow is approaching LNG Canada's Kitimat port, according to LSEG ship tracking data. The vessel is expected to arrive on June 29 and will be loaded with LNG, the sources said.
The LNG Canada project is a joint venture between Shell Plc, Petronas, PetroChina, Mitsubishi Corporation and Kogas.
Once the facility enters service, Canadian gas exports to the U.S. will likely decline, traders said, as Canadian energy firms will have another outlet for their fuel. For now, the U.S. is the only outlet for Canadian gas.
Canada has two other smaller LNG export facilities also under construction on the Pacific coast. The facilities, Woodfibre LNG and Cedar LNG, are expected to be complete between 2027 and 2028.
Canada exported about 8.6 billion cubic feet per day (bcfd) of gas via pipelines to the U.S. in 2024, up from 8.0 bcfd in 2023 and an average of 7.5 bcfd over the prior five years (2018-2022), according to data from the U.S. Energy Information Administration. That compares with a record 10.4 bcfd in 2002.
(Reuters - Reporting by Curtis Williams in Houston and Amanda Stephenson in Calgary; Editing by Nia Williams and Chris Reese)
