+34
LNG Canada will use Chinese steel for its $33-billion Phase 2 expansion in Kitimat, B.C., saying no Canadian yard can build the complex modules. The project adds two trains, doubles output to 28 megatonnes and creates thousands of jobs.
LNG Canada has confirmed it will use Chinese steel for its $33-billion Phase 2 expansion in Kitimat, B.C. , a decision the company says is driven by necessity rather than preference.
LNG Canada Phase 2 Expansion
The expansion, announced Tuesday, will add two new liquefied natural gas processing units, known as trains, bringing the site to four trains in total. Production will double from 14 to 28 megatonnes per year once construction is complete, likely in the early 2030s. The expanded facility will become the second-largest of its kind in the world, according to Prime Minister Mark Carney. He said the project will create thousands of new jobs while connecting Canadian energy with global markets.
A company spokesperson told CTV News that no Canadian fabrication yards can manufacture and deliver the modules required for Phase 2. The challenge is not a preference for offshore steel, but the specialized fabrication capability required for modules of this scale and complexity, the spokesperson said. The modules will be built by the state-owned China Offshore Oil Engineering Co., Ltd., or COOEC, which also manufactured the first two trains now operating at the facility.
Only five fabrication yards globally have the combination of space, capacity, quality systems and marine access required for this scope of work. Marine access is essential, the company said. Modules of this scale cannot be transported to Kitimat by road. They must be fabricated at a facility with direct access to tidewater, shipped by sea, then received through LNG Canada existing module offloading facility and integrated into the plant.
At an event marking the final investment decision, Carney was asked whether the expansion would use Canadian or Chinese steel. There will be full opportunities to buy Canadian steel, and we will continue to invest in the Canadian steel industry to make sure that is the case, Carney said. But it will be for them to decide. The expansion will add a new LNG storage tank, a condensation tank, a loading berth and expanded processing systems.
LNG Canada Ownership and Exports
The company exports natural gas piped from northwestern Alberta and northeastern B.C. to Kitimat, where it is turned into a liquid state and loaded onto specialized tankers bound for Asian markets. LNG Canada is a joint venture between Shell Canada Energy, the majority operator and project leader with a 40 per cent stake, and state-owned PetroChina with 15 per cent.
Malaysia Petronas holds 25 per cent, Japan Mitsubishi Corporation holds 15 per cent and Korea Gas Corporation, or KOGAS, holds five per cent. LNG exports are distributed by these five energy giants to Asian markets based on their relative stakes. Prior to the Phase 1 final investment decision in 2018, the joint venture sought and received an exemption from steep anti-dumping and countervailing duties on fabricated industrial steel from China. The value of that concession was estimated at $1 billion.
Chinese Steel Duties and Tariffs
The duties in effect when the use of Chinese steel first drew attention in 2018 expired after five years and have not been renewed. LNG Canada told CBC News there are no tariffs now on importing steel components from its Chinese supplier. The office of Finance Minister Francois-Philippe Champagne said the Canada Border Services Agency determines whether additional levies are required on Chinese steel to avoid predatory dumping.
In this case, the measures were dropped and Canadian producers have not objected because these components do not directly compete with what they make. In 2024, other surtaxes and tariff rate quotas were placed on a list of specific Chinese steel products that could threaten Canada domestic industry. That list does not include what LNG Canada is importing. Some steel for the expansion will come from Canada.
Canadian Steel and Supply Chains
Coastal GasLink is targeting almost 15,000 tonnes of steel from Canadian suppliers or mills, representing approximately 70 per cent of the steel required for new compression stations along its pipeline network to Kitimat. When the proposed expansion led the list of early projects referred to the new federal Major Projects Office in September 2025, Carney told reporters these ambitious building projects would be at the heart of our new, comprehensive Buy Canadian policy.
That apparent prioritization of Canadian supply chains would be more consistent with the assurances the prime minister gave at that time. The federal government has not said whether it will require Canadian steel for the Phase 2 modules. The final investment decision for Phase 2 was announced Tuesday, with construction expected to begin in the coming years.
First LNG from the expansion is targeted for the early 2030s, assuming regulatory approvals and market conditions remain favourable.
Please follow us on Google to support us
CBCAlerts 
CP24:LNG Canada to import steel from China for $33B project in Kitimat, B.C. 
CTVNews:LNG Canada to import steel from China for $33B project in Kitimat, B.C. 
CTVToronto:LNG Canada to import steel from China for $33B project in Kitimat, B.C.This story was compiled and edited by the HeadTopics newsroom and HT AI from the reports above.
Chinese Steel Imports Kitimat B.C. LNG Terminal Mark Carney Buy Canadian Policy Coastal Gaslink Pipeline Steel LNG Canada Kitimat Expansion Chinese Steel Phase 2 Canadian Steel Policy LNG Canada Phase 2 COOEC Canadian Steel
Canada Latest News, Canada Headlines
Similar News: You can also read news stories similar to this one that we have collected from other news sources.
Steel plants are crying for steel even though Stelco has just laid off hundreds of workersThe U.S.-Canada trade war is aggravating market dynamics in Canada's steel sector
Read more »
New Kitimat search dog boosts Northwest rescue capacityJoelle Marsh and Solo become Kitimat’s first validated K9 search team
Read more »
LNG Canada Phase 2 to Use Chinese Steel for Kitimat ExpansionLNG Canada confirms Chinese steel for its Phase 2 expansion in Kitimat, B.C., citing a lack of Canadian fabrication yards for specialized modules.
Read more »