Shell-led LNG Canada approves Phase 2 to reach 28 million tonnes; Fluor's $7.5 billion share is twice its energy backlog

The partners in LNG Canada, led by Shell, have taken a final investment decision on the Phase 2 expansion of their liquefied natural gas export plant in Kitimat, British Columbia, doubling its capacity from 14 million to 28 million tonnes a year, according to LNG Canada's announcement. The expansion adds two processing trains, a storage tank, a condensate tank and a loading berth inside the existing site.

Shell holds 40% of the venture, with Petronas at 25%, PetroChina and Mitsubishi at 15% each and Korea Gas at 5%. The project is expected to attract 33 billion Canadian dollars, about $23.2 billion, in private capital, CNBC reported, with commercial operations expected in the early 2030s. Shell's London shares were down nearly 1% on Tuesday and are up more than 32% this year, per CNBC.

The contractor is the U.S.-listed story

Fluor said its 50-50 joint venture with Japan's JGC will do the engineering, procurement, fabrication, construction and commissioning, and that it will book its $7.5 billion share of the contract in the third quarter, according to its press release. The same partnership built Phase 1, which started producing LNG in June 2025.

The number the announcement does not put next to it is Fluor's own backlog. At June 30, its Energy Solutions segment had $3.46 billion of work in backlog, down from $5.58 billion a year earlier, according to Fluor's second-quarter results. The Phase 2 share alone is more than twice that figure, and about 28% of the company's total backlog of $26.9 billion. Energy Solutions revenue was $709 million in the second quarter, down from $1.1 billion, so the unit had been shrinking before this award.

One caution on the arithmetic: Fluor's second-quarter new awards already included a limited notice to proceed on Phase 2, and the company did not say how much of that is part of the $7.5 billion. The third-quarter report will show the net addition. The company had revenue of $15.5 billion in 2025.

Fluor shares were up 2.5% at $50.43 before the open, from Monday's close of $49.22, according to Nasdaq data.

The pipeline has to double too

A bigger plant needs more gas. TC Energy said its Coastal GasLink pipeline, which carries about 2.1 billion cubic feet a day to Kitimat, will proceed with its own Phase 2, adding compressor stations along the 670-kilometre route to nearly double capacity, according to the company's release. LNG Canada will manage that construction, and TC Energy said the structure limits its exposure to cost and schedule overruns. Five neighbouring First Nations can invest up to C$1 billion to buy the new storage tank through a special purpose entity, LNG Canada said.

What it means for gas buyers

The plant faces Asia, and its capacity does not arrive until the next decade, so it does nothing for gas prices this winter. What it changes is the long-term competition for Asian contracts that U.S. Gulf Coast exporters also chase. For traders, the near-term effect runs through the contractors and equipment suppliers rather than through the price of natural gas.

Sources: LNG Canada; Fluor; Fluor filings on SEC EDGAR; TC Energy; CNBC; Nasdaq quote data (premarket, 8:52 a.m. ET). This is market information, not investment advice.