Petronas’ first LNG cargo from the massive LNG Canada project is now expected to sail in July 2025, missing its initial end-2024 target, the company said on Tuesday. The delay is due to extreme winter conditions in British Columbia, which slowed insulation work at the Kitimat facility, as well as earlier labor shortages, according to Petronas EVP Datuk Adif Zulkifli.

LNG Canada, a joint venture between Shell (40%), Petronas (25%), Mitsubishi Corp. (15%), Korea Gas Corp. (5%), and PetroChina (15%), will process 1.9 billion cubic feet of natural gas per day—a significant chunk of Canada’s output. Once operational, the project is expected to boost Canadian natural gas prices, as supply that previously flowed south to the U.S. gets redirected to Asian markets.

Michael Rose, CEO of Tourmaline Energy, Canada’s top natural gas producer, has warned that LNG Canada’s start-up will erase the longstanding discount on Alberta’s AECO gas prices. With natural gas currently trading at $4.14/MMBtu (+3.63%), the industry expects further upside as demand from LNG exports kicks in.

Despite Petronas’ project setback, the bigger picture remains bullish for Canadian LNG. The U.S. is doubling its LNG capacity, and Canada is projected to export 36.2 million tons of LNG per year by 2040, according to Wood Mackenzie. However, Canada’s federal government has remained lukewarm on LNG, recently shutting down hopes of a German supply deal.

Meanwhile, Petronas President & Group CEO Tan Sri Tengku Muhammad Taufik emphasized that the company will navigate any geopolitical headwinds, including potential U.S. trade policy shifts, by sticking to established pricing mechanisms and fair trade practices.

While LNG Canada’s debut has been pushed back, once it launches, it will reshape North America’s gas flows—and investors are taking note.

By Julianne Geiger for Oilprice.com

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