CALGARY — Shell and Mitsubishi Corp. have announced they are exploring options to sell parts of their stakes in the $40 billion LNG Canada project, according to sources familiar with the matter.Reuters reports Shell — the project’s largest shareholder with a 40% stake — has been working with Rothschild & Co. in recent weeks to gauge interest from potential buyers.It is said that Shell could be in the market to sell up to three-quarters of its holdings — or roughly 30% of the project — though the company is also considering other options to manage its exposure to the project’s operational Phase 1 and proposed Phase 2 expansion.One source estimated that a buyer of Shell’s stake could face a commitment of roughly $15 billion, including equity, debt, and capital requirements tied to Phase 2.Mitsubishi, which owns 15% of LNG Canada, has hired RBC Capital Markets to advise on its options, according to two sources.Located in Kitimat, BC, LNG Canada is the first major North American LNG export facility with direct access to the Pacific Coast.The project benefits from relatively low feedstock costs, as Canadian natural gas prices typically trade at a discount to the US Henry Hub benchmark.The facility began production in June but has since experienced operational setbacks, as its second processing unit, known as Train 2, went offline in December, nearly a month after startup..Japan looking to Western Canada LNG to reduce geopolitical energy risks in 2026.The sources have stated that any sales by Mitsubishi or Shell are not yet guaranteed and that discussions are at an early stage.Any formal sale process will not likely begin until later this year, and the sources do not know how much of Mitsubishi’s stake could be on offer.The potential moves come as the owners of the facility have discussed a possible expansion and another stakeholder — Petronas — completed a deal in December to sell a fifth of the venture (a 25% stake in LNG Canada) to MidOcean Energy, a firm backed by EIG and Saudi Aramco.PetroChina also owns 15% of the project, with Korea Gas Corporation holding 5%.Current and prospective owners are now weighing concerns about a potential global oversupply of LNG as new export capacity comes online in 2026.In March, Shell — the world’s largest LNG trader — said it was targeting annual LNG sales growth of 4% to 5% over the next five years and production growth of about 1% per year.Shell and its partners are working toward a final investment decision on Phase 2 of LNG Canada, potentially as soon as this year, which would double the project’s export capacity.Once LNG Canada is fully ramped up, Phase 1 of the project is expected to have capacity to export 14 million metric tonnes of LNG per year.According to one source, Shell has told potential bidders it plans to retain a 30-year gas supply contract with the terminal.
