LNG Canada is doubling the size of its Kitimat, B.C., export facility, approving a second phase at the country’s first large-scale LNG terminal only a year after its first cargo left the dock.

Prime Minister Mark Carney attended the announcement in Vancouver Tuesday.

LNG Canada’s phase 2 would increase production from 14 million tonnes a year to 28 million, according to the company.

The federal government, which referred the project to the Major Projects Office last year, says it is expected to become the world’s second-largest LNG facility and attract $33 billion in private capital.

The expansion comes as B.C. heads into an election and Parliament returns for a fall session focused on major projects, with the federal and provincial governments likely to present it as a vote of confidence in Canada’s resource sector and regulatory climate.

Federal Conservative Leader Pierre Poilievre says Prime Minister Mark Carney shouldn’t take credit for the project going ahead, arguing it should not have taken a decade for the joint venture to make the move. He blamed the delay on requirements that the project be powered by hydroelectricity rather than natural gas.

“Mr. Carney should not be bragging about anything,” he said.

The energy minister’s parliamentary secretary, Calgary MP Corey Hogan, tells iPolitics he doesn’t think the power requirements delayed a final investment decision for a project expansion. 

“I mean, of course, [Poilievre]’s going to say that, this is his oppositional mode,” he said. “But I think he should join us in celebrating what is a huge win for Canada and B.C.” 

Meanwhile, the CEO of LNG Canada, Chris Cooper, thanked “the government of Canada and British Columbia over the years, across the political spectrum and indeed through election cycles,” during the announcement Tuesday.

The joint venture participants in the project are Shell, PETRONAS, PetroChina, Mitsubishi Corp. and KOGAS. 

Earlier in May, LNG Canada approved hundreds of millions of dollars in additional funding to finalize work toward a potential final investment decision by the end of the year, and two weeks later, the federal and B.C. governments signed an agreement with the company to co-operate on the steps still needed before that decision.

Over the summer, five B.C. First Nations, the Gitga’at, Gitxaała, Haisla, Kitselas and Kitsumkalum, were offered an option to invest up to $1 billion for majority ownership of the storage tank infrastructure linked to the expansion, which would be leased back to the project for its operating life.

Federal government bullish on LNG exports

LNG Canada is the first large-scale LNG export terminal to operate in Canada, and other projects, including Ksi Lisims LNG to the north, are now seeking to follow it, with plans that also involve partnering with First Nations and using low-carbon power.

The U.S.-Israel war on Iran and the resulting closure of the Strait of Hormuz have disrupted gas production and shipping routes over the past six months, strengthening the case for export facilities outside the conflict zone and creating more opportunities for long term contracts.

The International Energy Agency’s latest gas market report estimates that LNG loadings from Qatar and the United Arab Emirates fell by 35 billion cubic metres from March to June compared with the same period last year. Suppliers in North America and Africa have stepped in to fill the gap, with non-Gulf production up almost 18 per cent, the report says.

Some groups, such as the International Institute for Sustainable Development, argue that LNG export projects are risky, and should not benefit from government support in the form of tax breaks and subsidies for related infrastructure. 

“LNG Canada Phase 1 is expected to emit 2.1 megatonnes of CO2e annually, roughly equivalent to the annual emissions of around 450,000 passenger vehicles,” argues the institute’s lead on Canada’s energy transition, Nichole Dusyk. 

“These emissions could double with LNG Canada Phase 2 going ahead.” 

READ MORE: Energy minister dismisses concerns about long-term LNG prices 

Hogan told iPolitics that even in a world that uses less oil and gas, demand for Canadian supply will keep growing as countries increasingly see it as a “transition fuel” between coal and renewables.

“In the Pacific nations, and the APEC nations, there is a lot of enthusiasm about Canadian LNG,” he said. “They are looking to diversify their imports, and we are looking to diversify our exports, and that’s a pretty natural partnership.”

Representatives of the skilled trades also welcomed LNG Canada’s expansion decision. Sean Strickland, head of the Building Trades unions, said he expects it to create “thousands of good-paying, unionized jobs, and put Canadian workers and resources to work.”