Canada fast-tracks Tilbury LNG expansion

Tilbury LNG expansion is British Columbia’s fifth project to get government approval to be accelerated.

What: Ottawa has given the green light for the Tilbury LNG terminal to be expanded with fast-track status as a priority project.
Why: Canada is keen to expedite LNG projects in the development stage amid increased demand from Asian countries due to the Middle East conflict and Europe’s desire to diversify away from US LNG.
What Next: Construction on the expansion is scheduled to begin in early 2027 with completion of the expansion for LNG marine fuel projected to be completed in 2030, while the larger expansion is expected to be complete by 2035.

Utility FortisBC’s (TSX: FTS) Tilbury LNG project has been given authorization by the provincial and federal governments to begin carrying out its $3.5bn expansion, domestic media the Financial Post reported on September 22.

Tilbury LNG is located in Delta, British Columbia about 30 km south of Vancouver on Tilbury Island. The facility has been liquefying and storing gas since 1971, and it supplies fuel to the marine shipping industry as well as the LNG market.

The facility’s current liquefaction capacity is 120,000 cubic metres per day. However, the expansion will increase production capacity by almost 12 times to 3.4mn tonnes per year (tpy).

The expansion of the project is being carried out in a two-phase approach. In July, FortisBC received the go-ahead from British Columbia’s provincial government to proceed with the expansion of Phase 1B of Tilbury LNG. Upon completion of Phase 1B, the LNG capacity will increase by up to 650,000 tpy. 

Additionally, the expansion will also help meet the growing need for LNG fuelling service for ships at Vancouver’s port. Government officials believe construction could begin on Phase 1B by as early as mid-2027 with the facility beginning operation in early 2031.

Meanwhile, the approval granted this week for Phase 2 will be the larger construction project that will include adding a storage tank with a capacity of 142,400 cubic metres of LNG.

The new tank will play a key role in improving Tilbury’s ability to store gas for Vancouver during period of high demand. A construction schedule has yet to be announced but FortisBC hopes to have Phase 2 completed by 2035.

The project has been able to be streamlined under a new federal program in Canada called “One Project, One Review”, which aims to expedite nation-building projects. Ottawa is seeking to transform its economy and shift away from reliance on the US as its dominant trading partner amid President Donald Trump’s attempts to redesign global trade with his tariffs program.

FortisBC has already received an environmental assessment certificate for the expansion from the British Columbia provincial government.

By increasing Tilbury LNG’s ability to supply marine fuel to the shipping industry with LNG, the Vancouver port will be able to supply more vessels with cleaner LNG as opposed to bunker fuel, which is much dirtier.

The switch to LNG from bunker fuel can lower a vessel’s carbon dioxide emissions by as much as 25% and emissions by up to 95%.

FortisBC first initiated the project in 2020 with a completion target of Phase 2 aiming for 2028, however the project’s timelines were derailed by the Covid-19 pandemic.  

After suffering the speed bump during the Covid-19 pandemic, desire to expedite the project has emerged following the fractured trading relationship between Canada and the US, with Trump referring to Canada as the 51st state of the US.

Canada has been prioritising strengthening trade ties with Europe with Ottawa and the European Union exploring a close "associate member" arrangement during a trip by Canadian Prime Minister Mark Carney to Europe in mid-September.

Europe has also grown weary of over-dependence on the US for its LNG supply, particularly as Trump threatened to annex Greenland from Denmark.

German firms Uniper and SEFE have already signed 20-year offtake agreements with Canada’s Ksi Lisims LNG project.

Canada has commissioned studies as it seeks to develop a northern or eastern port in order to ship LNG to buyers in Europe, and a proposed Churchill LNG export terminal in northern Manitoba could be developed to ship super-chilled fuel from Canada to European buyers.

As well, First Nations group Kino Aski and Marinvest Energy Canada in August revived plans to build a major LNG project in Quebec, that would see the development of an energy corridor to transport natural gas from western Canada to the Quebec port of Baie Comeau, where an LNG export terminal would be built.

Europe has even gone as far as suggesting that it could buy Canadian LNG that would be shipped via the Panama Canal, although NewsBase Horizon, our intelligence and advisory division, views this option as unlikely to be pursued due to higher transportation costs and expensive canal fees.

Meanwhile, Canada has also felt increasing urgency to expedite development of its LNG sector following the huge supply gap left by Qatar. The gulf country was the world's second-largest exporter of super-cooled gas in 2025, but it has effectively been sidelined since March following Iran’s closure of the Strait of Hormuz.

Damage to two liquefaction trains at QatarEnergy’s Ras Laffan Industrial Complex appears to be more severe than originally predicted. In mid-September Qatar opened conversations with US companies about buying LNG in long-term deals through 2031, suggesting its force majeure it declared to Asian buyers could involve a lengthy extension.

Qatar also acknowledged in mid-September that its expansion plans to raise production capacity to 142mn tpy by 2030 may need to be delayed as the closure of the Strait of Hormuz delays critical equipment from arriving on schedule.

Indeed, an enormous opportunity has emerged for Canada to secure buyers in both Asia and Europe as a reliable supplier of LNG and Ottawa has recognised this opportunity deciding to push full steam ahead.