Shell’s LNG Canada export plant is experiencing technical problems as it ramps up production at Kitimat, British Columbia.
One LNGC was diverted away from the facility in recent days, according to four sources and LSEG ship tracking data, Reuters said.
The plant was the first major LNG export facility in Canada to come online and is also the first on the west coast of North America, providing direct access to Asia, the world's largest LNG market.
LNG Canada is expected to convert about 2 bill cu ft of gas per day to LNG when fully operational, which market participants have hoped will boost Canadian natural gas prices.
Western Canadian natural gas prices remain depressed, however, due to a persistent supply glut that has not yet been drawn down by fresh demand from LNG Canada's 1st July startup.
The daily spot price at the Alberta Energy Company storage hub closed at $0.22 per MMBtu yesterday, compared to the US Henry Hub benchmark price of $3.12, according to LSEG data.
The facility, which took nearly seven years to build, has been operating at less than half the capacity of its first train, two of the four sources said.
Train 1 has experienced technical issues with a gas turbine and with a refrigerant production unit, according to two other industry sources.
In response, a LNG Canada spokesperson told Reuters that a newly built facility of this size and scale may face operational setbacks, as it ramps up production and stabilises.
There has been at least one LNGC diverted by Shell to Peru, while other vessels were close to the facility, LSEG ship tracking data showed.
‘Ferrol Knutsen’, a 170,520 cu m LNGC, signalled that it was heading for Kitimat but then changed direction and is now off the coast of California on her way to Peru, according to LSEG ship tracking data.
LNG Canada is a joint venture between Shell, Malaysia's Petronas, PetroChina, Japan's Mitsubishi Corp and South Korea's KOGAS.
When fully operational, LNG Canada will have a capacity to export 14 mill tonnes per annum, according to the company.
Thus far the plant has exported four cargoes, including its first shipment on 1st July. Another shipment is expected in the coming days, the LNG Canada spokesperson said.
The pace of exports from the plant will increase as it moves through early operations and into a steady shipping cadence.
"In regular operations in Phase 1, we anticipate loading one export cargo from our facility every two days," the spokesperson added. (July 30, 2025, Source: https://lngjournal.com/index.php/latest-news-mainmenu-47/item/114081-lng-canada-experiencing-teething-problems)
CANADA - LNG - Production