LNG Canada Phase 2: Construction could redirect $3.3 billion in annual natural gas trade to non-U.S. markets, highlights the MEI
- This could represent a 20.6-percentage-point increase in Canadian natural gas exports heading to non-U.S. markets.
Montreal, September 29, 2026 – The construction of LNG Canada’s Phase 2 expansion would help make Canada’s economy more resilient and prosperous, highlights the MEI’s Gabriel Giguère reacting to this morning’s final investment decision announcement.
“The best way to reduce Canada’s reliance on U.S. markets is to allow the construction of the export infrastructure we need, and LNG Canada does just that,” says Gabriel Giguère, senior policy analyst at the MEI. “Today’s announcement highlights once more just how much demand there is for Canadian energy when we can get it to market.”
With Phase 2 moving forward, LNG Canada plans to double its liquefied natural gas production capacity, from 14 million tonnes per year to 28 million tonnes per year.
The total volume of LNG from this facility represents the equivalent of one-third of all LNG that transited through the Strait of Hormuz last year.
At 2025 prices, this represents an increase of $3.3 billion per year to Canada’s non-U.S. liquefied natural gas export capacity.
Last year, LNG Canada Phase One coming online marked the first time Canadian natural gas producers could export directly to non-U.S. markets. Data shows this led to 15.0 per cent of our natural gas exports heading to countries other than the United States in 2026.
With the expansion, it is expected that Canada could divert a total of up to 41.2 per cent of its natural gas exports to non-U.S. markets, based on data from 2025. It also represents an opportunity to increase production, helping create thousands of indirect jobs in construction and extraction activities.
“For years, Canada’s allies in Asia and Europe have been coming here demanding better access to Canadian energy in order to reduce their dependence on less reliable sources, and we’re finally delivering,” adds Giguère. “Here’s hoping this is not the last such project that goes ahead, as a number of other promising ventures have been proposed on our East and West coasts.”
In recent years, leaders from various countries, notably Japan, South Korea, Germany, Poland, and most recently Ukraine, have expressed a desire for better access to Canadian liquefied natural gas.
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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
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