BC Premier Eby Meets PetroChina in Beijing Over LNG Canada Phase 2 Investment Decision as Kitimat Targets 28 MTPA Total Capacity

British Columbia Premier David Eby arrived in Beijing this week as part of a June 27 to July 3 trade mission, with meetings centered on advancing the final investment decision for LNG Canada Phase 2. Eby described the PetroChina engagement as his "really big fish" on the trip, per CBC News. The province has projected $28 billion in long-term provincial revenue as the rationale for securing Beijing's commitment before the end of 2026.

LNG Canada Phase 2 would expand the Kitimat, B.C., export terminal that began operations in 2025 under Phase 1. The trade mission was shortened at the federal government's request. Eby visited Beijing, Shanghai, and Guangzhou, describing China as British Columbia's second-largest trading partner and emphasizing a goal of doubling international trade over the coming decade.

LNG Canada's Consortium: Shell Canada Operates, PetroChina Holds 15% via CNPC

Shell Canada, a subsidiary of Shell plc, operates LNG Canada and holds the largest equity stake at 40%. Petronas, the Malaysian national oil company, holds 25%. PetroChina, with 15%, is the third-largest equity partner. Mitsubishi Corporation and Korea Gas Corporation hold 15% and 5% respectively.

PetroChina is the publicly listed subsidiary of China National Petroleum Corporation (CNPC), China's largest state-owned energy company. CNPC operates in more than 70 countries and produces more than 1.7 billion barrels of oil equivalent per year globally. PetroChina's 15% stake in LNG Canada provides CNPC with a long-term supply chain anchor in a Western Hemisphere terminal, a strategic hedge against Middle Eastern supply disruptions.

The partnership requires PetroChina's consent to sanction Phase 2. Eby's goal in Beijing was to identify and resolve any outstanding concerns before the consortium moves to a final investment decision. A delay or withdrawal by PetroChina would force Shell and the remaining partners to restructure the equity arrangement or find a replacement investor.

Phase 2 Capacity Math: 28 MTPA Combined Would Be the Western Hemisphere's Largest LNG Terminal

LNG Canada Phase 1 has a nameplate capacity of approximately 14 million tonnes per annum. Phase 2 would add a matching 14 MTPA, bringing total Kitimat terminal capacity to approximately 28 MTPA. That would make LNG Canada the largest LNG export facility in the Western Hemisphere by a substantial margin.

Canada's Energy Regulator projected total Canadian LNG exports reaching 48 MTPA by 2050 under its base-case scenario in the March 2026 Canada's Energy Future report. CER Chief Economist Darren Christie stated: "Canada's energy future isn't fixed." Even at full Phase 2 build, LNG Canada's 28 MTPA would leave a 20 MTPA gap below the CER's base-case export projection, requiring additional B.C. projects to close the difference.

The CER modeled Canadian natural gas production growing from 18.3 billion cubic feet per day in 2024 to 27 Bcf/d by 2050 under its base case. LNG exports would account for roughly one-quarter of that total volume, or 6.1 Bcf/d. The spread between the Lower scenario (4.3 Bcf/d, 33 MTPA) and the Higher scenario (7.9 Bcf/d, 62 MTPA) reflects direct dependency on final investment decisions such as the one Eby is pursuing this week.

European Storage Deficit and Asian Demand Underpin the Phase 2 Commercial Case

European gas storage has tracked well below year-ago levels, as Oil Authority reported when TTF rose to 43.72 euros per MWh amid an 8.6-percentage-point storage deficit. Persistent European undersupply has kept TTF elevated, anchoring the global LNG spot price floor. Asian LNG demand, measured by the Platts JKM assessment, forms the primary pull for Pacific Coast cargoes.

LNG Canada's Kitimat location offers a shipping time advantage over U.S. Gulf Coast terminals. A cargo from Kitimat reaches northeast Asian markets in roughly 10 days, compared to approximately 20 days from Sabine Pass, Louisiana. That 10-day transit differential translates into shipping cost savings that benefit Korean, Japanese, and Chinese buyers on time-sensitive supply contracts.

TC Energy's Coastal GasLink pipeline delivers feedgas to the Kitimat terminal from northeast British Columbia's Montney producing region. The pipeline runs approximately 670 kilometers. A Phase 2 sanctioning would require incremental Montney supply commitments and potentially additional pipeline capacity, deepening TC Energy's infrastructure role in the LNG Canada supply chain.