New signs are emerging that a final investment decision for the proposed LNG Canada Phase 2 expansion is drawing closer. The consortium behind the LNG Canada liquefied natural gas terminal in Kitimat has put its engineering and construction partner on notice to prepare for planning work on the expansion.
Flour Corp. Receives Limited Notice to Proceed
Irving, Texas-based Flour Corp. announced that its joint venture for what has been dubbed LNG Canada 2 has been given a "limited notice to proceed." This is one of the methodical steps LNG Canada needs to take before a final decision. According to Flour executive Pierre Bechelany, the limited notice enables the company to initiate early planning and move forward with key activities to support a proposed Phase 2 final investment decision.
South Korea Strengthens Energy Ties with Canada
Flour's announcement closely preceded a trade meeting in Ottawa between a top South Korean government official and Canada's Minister of Natural Resources, Tim Hodgson. Kang Hoon-Sik, a special envoy for strategic economic cooperation and chief of staff to South Korea's president, met with Hodgson to discuss expanding trade, including increasing Canadian LNG exports to Korea. South Korean utility Korea Gas Corp. (KOGAS), the smallest joint-venture partner in LNG Canada with a 5% stake, has become the largest buyer of LNG from the plant's initial startup.
From LNG Canada's first shipment in June 2025 through February 2026, almost 40% of the facility's LNG has gone to Korea, according to Canadian Energy Regulator data. Kang characterized the Canada-South Korea relationship as built on trust and vowed to elevate it into a fully integrated energy supply chain partnership.
Potential for KOGAS in Phase 2
The government officials also discussed the potential for KOGAS to remain a prospective partner for LNG Canada 2, with a commitment that South Korea would import at least 1.4 million tonnes of LNG per year from the facility for more than 30 years.
Joint Venture Partners and Customers
Dutch energy giant Shell is LNG Canada's lead partner with a 40% stake. Malaysian state-owned Petronas holds 25%, while Chinese state firm PetroChina and Japan's Mitsubishi Corp. each hold 15%. Japan and China have been the second and third largest customers for LNG Canada's first phase, taking 27% and 23% of shipments through February 2026, respectively.
LNG Canada's first phase includes two gas liquefaction units, known as trains, with a capacity of about 14 million tonnes per year. Phase 2 would double that capacity, making the terminal a major global LNG supplier.
