Canada’s Mark Carney boosts LNG projects in ‘nation-building’ push

Hello and welcome back to Energy Source, coming to you today from New York and Toronto, where Mark Carney is stepping up his government’s efforts to transform Canada into a global “energy superpower”.

My colleague Ilya Gridneff reports below on the prime minister’s efforts to double the country’s liquefied natural gas exports. Carney, who was a champion of decarbonisation while governor of the Bank of England, has embraced fossil fuels since winning the April election in Canada as he seeks to buttress his nation’s economy, which has been hit hard by Donald Trump’s tariffs.

Back in the US, I spent a few days visiting Chevron’s $5.7bn Anchor offshore oil platform and related facilities in the Gulf of Mexico for this FT Big Read.

Confidence in the oil industry is surging in the Gulf, where Chevron, Shell and BP are planning to grow their operations and bid for leases in Trump’s “Big Beautiful Gulf One” sale on December 10.

But some Democrats, environmentalists and safety advocates are concerned about loosening regulations in US waters that experienced the Deepwater Horizon disaster in 2010.

“We pay for the oil spills, we pay for the rising seas, we pay for the air and water pollution — and the CEO billionaires skate away with big profits,” said senator Ed Markey, who represents Massachusetts.

Thanks for reading, Jamie

Canada boosts its LNG ambitions

Canada is aiming to double its liquefied natural gas (LNG) output after the government announced plans to expand an existing site while moving to fast-track approval for a second project in an attempt to become a global energy superpower.

Prime Minister Mark Carney, once a champion of global decarbonisation, is looking to the country’s abundant fossil fuel resources as a way to reduce its reliance on US markets and recalibrate the economy.

Last Thursday, Carney announced the second tranche of “nation-building projects” that prominently featured LNG as part of a potential C$30bn (US$21.4bn) investment in the nation.

He said: “Canada’s new government is making bold choices to grow our economy stronger than ever before, with major investments, faster approvals, and a clear signal to workers and industry, it’s time to build.”

US President Donald Trump’s punishing tariffs on Canada — the US’s second-biggest trading partner — have spurred Ottawa to seek new customers in Asia and Europe with a pivot of its economy away from its southern neighbour.

Ksi Lisims, a proposed floating natural gas liquefaction and export facility located on the north coast of British Columbia, is being referred to Canada’s Major Projects Office with the aim of fast-tracking approval. 

Lisa Baiton, president and chief executive of the Canadian Association of Petroleum Producers, said the country “is on a path to become one of the top five LNG exporters in the world”, a milestone that is “critical to achieving the federal government’s vision to double non-US exports”.

In July, LNG Canada — on the coast of British Columbia in Kitimat — shipped its first cargo to global markets, marking a historic moment as Canada’s large-scale export facility became operational with a plan to export about 14mn tonnes of LNG each year.

LNG Canada is made up of Shell, Petronas, PetroChina, Mitsubishi Corporation and Korea Gas Corporation. 

One million tonnes of LNG is equivalent to 46bn cubic feet of gas, or eight per cent of the total natural gas used by Canadian households, according to Natural Resources Canada.

Carney wants to tap an expected increase in LNG demand in Asia and Europe, as countries diversify their energy supply and reduce reliance on coal.

Already, sales from LNG Canada have cushioned some of the decline in exports to the US.

Ksi Lisims would be Canada’s second-largest LNG facility and is touted as “one of the world’s lowest-emission LNG operations once fully electrified, with emissions 94 per cent below the global average”, according to the government.

It marks a dramatic shift for Canada’s government, whose former leader Justin Trudeau was criticised by the oil and gas industry for prioritising climate action over the economy.

Ksi Lisims LNG — a partnership of the Indigenous Nisga’a Nation, Rockies LNG and Western LNG — proposes to export up to 22.4bn cubic metres a year of natural gas.

In September Carney announced “LNG Canada Phase 2” to double production at the Kitimat site, which the government said would make it the second-largest facility of its kind in the world.

Two much smaller projects — Pacific Energy’s Woodfibre LNG, located on a historical site of a Squamish Nation village, and Cedar LNG, a floating platform majority-owned by the Haisla Nation — are also under construction.

But not everyone in Canada is enthusiastic about turning to fossil fuels as a driver of economic growth.

Analysts cite increasing competition expected from other LNG producers while the International Energy Agency warns of a multiyear supply glut starting in 2026.

“As new supply comes to market, notably from the US and Qatar, it should apply downward pressure on prices — offering welcome relief for gas importers worldwide,” said Keisuke Sadamori, IEA director of energy markets and security.

Growth in global gas demand is forecast to slow from 2.8 per cent in 2024 to below 1 per cent in 2025, the IEA reported.

Similarly, environmental groups have raised their concerns that Canada should not be expanding its LNG interests at a time of climate crisis.

Aly Hyder Ali, from Environmental Defence, a climate advocacy non-governmental organisation, said Canadians do not want their tax dollars going to largely foreign-owned oil and gas companies to build more LNG infrastructure.

“Ksi Lisims is a harmful and unnecessary project which would open Canadians up to volatile global gas markets, increase global emissions and harm British Columbia’s environment through fracking and methane flaring,” he said. (Ilya Gridneff)

Power Points

• India has announced it will dramatically increase purchases of US liquefied petroleum gas, as New Delhi seeks to ease trade tensions with Washington.

• Trafigura claims it was victim of “systematic fraud” by tycoon Prateek Gupta in legal dispute that has rocked the commodities trading industry.

• Gunvor’s $22bn gamble: how Torbjörn Törnqvist’s Russia deal collapsed under US pressure leaving the commodity trader scarred.

Energy Source is written and edited by Jamie Smyth, Martha Muir, Alexandra White, Tom Wilson and Malcolm Moore, with support from the FT’s global team of reporters. Reach us at [email protected] and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.