The newly elected Conservative government in British Columbia, Canada, committed to doubling LNG production by 2032 and tripling it by 2035, with four additional export facilities under development on Canada’s west coast. British Columbia offers an important geographic edge for shipping, as LNG tankers can reach Asian markets from the B.C. coast in about 11 days—avoiding longer routes through the Panama Canal or the Suez region, as Alaskan LNG would. The new B.C. government promises to cut red tape through faster permitting and approvals. The party also promised to end emissions limits, replace British Columbia’s carbon tax framework and reach out to energy companies that have exited the province’s LNG sector since 2018, including ExxonMobil, Chevron and Woodside. The Conservative Party’s energy platform contrasts with the outgoing New Democratic government, which opposed new oil pipelines and supported a ban on tankers along the province’s northern coast. Incoming Conservative Lorne Doerkson said, “I believe in energy,” and “We will cut red tape like it’s never been cut before.”
Currently, natural gas in Western Canada is in oversupply because there are not enough ways to export the region’s natural gas. The local price, known as the AECO (Alberta Energy Company Ltd.) price, is depressed and currently hovers around U.S.$1.40 per million BTU – about half the price of U.S. natural gas on the Gulf Coast, and a fraction of global prices.
The Montney region in northern B.C. is known not only for its sizeable reserves, but also for the quality of its wells, which rival those in the prolific Permian Basin, and for its affordability. The region has a “high number of undrilled locations,” as less than 10% of the Montney’s reserves have been produced. Montney natural gas wells also contain condensate used as a diluent that helps move heavy oil through pipelines, which can command a global premium price. This would assist in neighboring Alberta, home to enormous quantities of heavy oil.
In late September, Shell Canada announced that it will greenlight phase two of its recently built LNG Canada facility in Kitimat, B.C., enabling the company to double its annual production capacity from 14 million to 28 million metric tons. That $33 billion expansion follows Shell’s $19-billion acquisition of Arc Resources Ltd. in September, significantly boosting its natural gas reserves in the Montney region. Future production will feed the export plant. While expanded LNG exports will take years to materialize, other opportunities exist, and another company, Ovintiv, has found a way to sell 80% of its Montney production to a diversified mix of buyers, so it is not held captive by Alberta’s AECO price.
In addition to Phase 2 of LNG Canada, two other LNG projects are under development: Cedar LNG and Woodfibre LNG. Cedar LNG is located in Kitimat and is a 3.3 million metric tons per year floating facility. It reached a positive FID in June 2024, and overall construction has surpassed 70%, with an expected in-service date in late 2028. Woodfibre LNG, located near Squamish with a design capacity of 2.1 million metric tons per year, is under active construction with heavy modules arriving by ship. Other LNG projects are in advanced regulatory/commercial stages, such as Ksi Lisims LNG, which is located near Gingolx, depicted below. It is a proposed 12 million metric tons per year floating export facility that has secured major 20-year supply agreements with European buyers and is awaiting a final investment decision.
The Conservative government projects that its plan will increase GDP growth from the current projection of 1.9% to 2.5% in 2027, and from 2.1% in both 2028 and 2029 to 2.8% in 2028 and 3.2% in 2029.
U.S. Trade Negotiations Are Continuing
U.S. and Canadian negotiators are working on a deal to ease Trump administration tariffs on Canadian steel and autos. The negotiations focus on tariffs imposed under Section 232 of U.S. trade law, administered by the U.S. Commerce Department, including up to a 50% tariff on Canadian steel and a 25% tariff on autos. U.S. and Canadian trade talks collapsed in August over issues such as whether to cut duties on medium- and heavy-duty vehicles that Canadian negotiators wanted. U.S. automakers had hoped the trade talks would ease the U.S. 25% tariffs that have raised the cost of shipping vehicles and parts across the border. Trump has previously announced that he would raise the tariffs on steel and auto imports from Canada to 50% from January 1, 2027.
Conclusion
British Columbia’s newly elected Conservative Party intends to push LNG exports through faster permitting and reduced red tape. It is committed to doubling LNG production by 2032 and tripling it by 2035, with four additional export facilities under development on Canada’s west coast. British Columbia offers an important geographic edge for shipping, as LNG tankers can reach Asian markets from the B.C. coast in about 11 days—avoiding longer routes through the Panama Canal or the Suez region. Natural gas is abundant in the Montney region in northern B.C., with quality wells rivaling those in the Permian Basin. The region has a “high number of undrilled locations,” as less than 10% of the Montney’s reserves have been produced. Montney gas wells also contain condensate used as a diluent that helps move heavy oil through pipelines, which can command a global premium price.
