TC Energy announced on March 26 that the owners of the Coastal GasLink (CGL) pipeline system and the owners of the LNG Canada export facility have agreed to commercial terms for Phase 2 of CGL, a key milestone to advancing the project to a final investment decision (FID). Currently the pipeline can deliver approximately 2.1 Bcf/d of natural gas from northeast British Columbia to the Shell-operated LNG Canada export facility on the west coast at Kitimat, B.C. The second phase of CGL would double the pipeline's current capacity, and would be developed in conjunction with a doubling of the LNG Canada facility's current export capacity, which is currently 14 million tonnes per annum (MMtpa). One of the terms of the new agreement is that LNG Canada will lead the construction of CGL Phase 2. TC Energy is the operator of the Coastal GasLink pipeline, and Shell is the operator of the LNG Canada facility.
It will be interesting to see if momentum towards FID for the second phases of LNG Canada and CGL picks up, given this announcement and the current disruptions to global LNG supply due to the conflict in Iran. Shell holds minority ownership stakes in two Qatari LNG export facilities, with a combined output capacity of approximately 5 MMtpa net to Shell's ownership interests, and smaller stakes in two more Qatari LNG export facility projects in various stages of development that have a combined planned output capacity of approximately 3.5 MMtpa net to Shell's interests.
KKR and Alberta Investment Management Corporation (AIMCo) are the other owners of Coastal GasLink. Petronas, PetroChina, Mitsubishi Corporation, and Korean Gas Corporation (KOGAS) are the other LNG Canada owners.
Note that volumes on Phase 1 of CGL are expected grow by another 04 Bcf/d once the 3.3 MMtpa Cedar LNG project is fully ramped up. The Cedar project is located near the LNG Canada facility and is expected to take first feed gas in late 2028. Pembina Pipeline Corporation is the operator of Cedar and owns 49.9% of the project, while the Haisla First Nation is the majority owner.
Link to announcement: Coastal GasLink Phase 2 advances step forward with new commercial agreements
