LNG Canada Boosts Output Amid Iran Conflict, Bolstering Global Gas Supply

Kitimat, British Columbia – LNG Canada, a Shell-led venture, has significantly increased its production and exports to Asia in early March 2026, responding to escalating geopolitical tensions in the Middle East and the potential disruption of global gas supplies due to the Iran conflict. The move aims to bolster North American gas exports and stabilize energy markets facing increased uncertainty.

Production Ramps Up

The LNG Canada facility in Kitimat, British Columbia, which began operations in June 2025, is now exporting approximately 1.2 million tonnes of liquefied natural gas (LNG) per month, nearing its full capacity of 14 million metric tonnes per year [The Deep Dive]. In the first eleven days of March, the facility shipped five cargoes, exceeding half of February’s total volume, with a sixth shipment departing on Tuesday [World Energy News]. These shipments were destined for Japan, South Korea, and the Philippines.

Geopolitical Drivers

The increased production comes as the Iran conflict threatens Asian natural gas supplies, which are particularly vulnerable to global disruptions [Reuters]. Qatar, a major LNG supplier providing approximately 20% of the global trade, has been forced to halt production and declare force majeure due to the conflict blocking tankers from transiting the Strait of Hormuz [The Deep Dive]. This disruption could potentially choke off up to 20% of the world’s LNG shipments.

Strategic Importance of LNG Canada

LNG Canada represents a key step in diversifying global LNG supply. As the first large-scale Canadian LNG facility to begin production, and the first major North American plant with direct access to the Pacific Ocean, it offers shorter sailing times to Asian buyers compared to exporters on the U.S. Gulf Coast [The Deep Dive]. Analysts at RBN Energy note that the company is actively working to reach full capacity and capitalize on higher prices in Asia [The Deep Dive].

Future Expansion

A proposed expansion of the LNG Canada facility could double its capacity to 28 million tonnes per year by the end of the decade [The Deep Dive], further solidifying its role in the global energy market.

Western Canadian Gas Prices

Despite the increased LNG exports, Western Canadian natural gas prices remain at a discount compared to the U.S. Benchmark. Daily spot prices at the Alberta Energy Company (AECO) storage hub hovered around $2 per million British thermal units on Tuesday, a $1.25 discount to the U.S. Henry Hub benchmark.