A lot has happened since our last liquefied natural gas (LNG) update. To bring you up to speed, here are some key themes taking shape regarding LNG globally and at home, and how Canada stands to benefit from them.

As a refresher, Canada officially became a global LNG exporter when the first shipments left Kitimat, B.C. in June 2025. Fast-forward a year later, and we have already hit the 100-shipment mark.

For background, LNG Canada Phase 1 is a $40 billion infrastructure project that has a raw inlet capacity of approximately 1.8 billion cubic feet per day (bcf/d) of feed gas. Current production is climbing towards facility constraints. It connected the Montney formation in Alberta and B.C. to the Pacific Ocean and overseas markets via the Coastal GasLink pipeline, fundamentally changing the demand profile for Canadian natural gas moving forward.

Now, with LNG Canada evaluating its final investment decision for Phase 2—expected later this year—and receiving approvals and equity framework agreements from neighbouring Indigenous communities, we are one step closer to unlocking the facility's full 3.7 bcf/d target capacity.

Geopolitical shifts and the global LNG outlook

To understand the current Iran war-driven volatility in the market, you have to look at the underlying demand. Shell’s latest 2026 LNG Outlook maintains that global demand is projected to surge by 65% by 2050 from 2025 levels, taking the market to about 92 bcf/d.

This isn't just about economic growth. Natural gas also has a critical role in reducing reliance on higher-emitting coal. Shell's report identifies a widening structural gap between regional gas demand and domestic production over the coming decades, creating a long-term opportunity for LNG suppliers capable of delivering competitive and reliable volumes into a region.

Heading into 2026, the consensus was that a massive wave of global supply was about to hit the water to easily meet this demand. The International Energy Agency's (IEA) Q1 2026 Gas Market Report projected that global LNG supply growth was set to accelerate to its fastest pace since 2019. The market was bracing for an impending glut that was widely expected to pressure spot prices downward and create a buyer-friendly market.

Instead, the Iran war flipped that narrative virtually overnight. The resulting security premium is being driven by Asian energy supply chains. Prior to the conflict, China, South Korea, and Japan relied on the Middle East for approximately 30%, 20%, and 11% of their LNG imports, respectively.

The IEA has noted that, with Middle Eastern supplies constrained, the anticipated supply wave has been entirely offset. In fact, Shell stated that under more severe disruption scenarios, global LNG exports could experience a rare annual contraction in 2026.

Consequently, these markets are looking to diversify their energy portfolios away from the Persian Gulf. Canada's 11-day, open-ocean shipping route across the Pacific is looking even more attractive, offering the reliability and geographic diversity the global energy system increasingly values.

Is Canada filling enough of the gap?

Currently, LNG Canada Phase 1 (as of May 2026) exports approximately 1.5 bcf of LNG a day. For reference, the 2025 average was 0.3 bcf/d. While the project has ramped up since its initiation, Canada’s 2026 global daily average represents only 2.7% of global supply. However, with two new LNG projects under construction and two proposed—Ksi Lisims which has already secured purchase agreements and LNG Canada Phase 2 project—Canada can increase its share in the global LNG ecosystem.

Other major players are recognizing Canada’s value. Shell’s $22-billion acquisition of ARC Resources validates Canada's LNG value proposition by securing massive Montney reserves for export.

The vast majority of Canada’s LNG exports are making their way to key Asian markets, with approximately 40% destined for South Korea and 35% to China.

As global supply chains face historic stress tests, Canada has the resources, improved proximity to key markets, and the stability to step into the void.

Answer to the previous trivia question: The labour market participation rate in Alberta has been higher than the national average every year since at least 1976 (when the current data series begins).

Today’s trivia question: What was the volume of LNG global trade supply in 2025?