Canada LNG
On a Roll
What the 2006 warning about Kitimat, Gazprom, and Alberta tells us about Alaska’s race against its neighbor — now that Canada has already crossed the finish line.
The Original 2006 Warning
In July 2006, while Alaska debated which gas pipeline route to build, two developments in Canada were already reshaping the Pacific LNG market. Russia’s Gazprom and Petro-Canada had advanced a 25-year supply agreement targeting a Quebec regasification terminal. Meanwhile, on the Pacific coast, Kitimat LNG inked a joint venture for the Pacific Trail Pipeline — a 290-mile link to Summit Lake designed to funnel Pacific-sourced LNG into Alberta’s oil sands and down to California and Washington State.
The Kitimat terminal was designed to handle 1 billion cubic feet per day, with WestPac Terminals eyeing a competing facility at Prince Rupert. Russia’s Putin and Canada’s Harper issued a joint G8 statement calling for LNG market development. The noose around Alaska’s Pacific market ambitions was tightening — and Juneau wasn’t paying attention.
Original Lamb commentary (2006): “I wouldn’t be surprised to see Gazprom target the Kitimat facility… [Kitimat LNG’s openness to any LNG supplier] is bad news for the Alaska LNG supporters.” That prediction proved prescient. But the scale of what followed was larger than even that warning captured.
What Has Changed Since 2006
LNG Canada’s terminal in Kitimat, British Columbia shipped its first cargo in June 2025 — officially making Canada an LNG-exporting nation. The project, a $40 billion joint venture led by Shell and including Petronas, PetroChina, Mitsubishi, and Korea Gas, now operates two processing trains with a combined capacity of 14 million tonnes per annum. It is the largest private sector investment in Canadian history.
Alaska’s project — a $44 billion, 807-mile pipeline from Prudhoe Bay to a liquefaction terminal at Nikiski — remains in development. In early 2025, the Alaska Gasline Development Corporation transferred majority control to Glenfarne Energy Transition. The pipeline targets mechanical completion in 2028 and first gas delivery in 2029, with full LNG export operations eyed for 2031.
The gap between Canada’s operational terminal and Alaska’s construction timelines is not merely symbolic. It represents a strategic head start in the race for the Asian contracts that will determine whether either project is commercially viable.
| 14 mtpa LNG Canada Phase 1 — operational 2025 | 20 mtpa Alaska LNG targeted — early 2030s | 10 days Kitimat to North Asia — equal to Alaska |
| $109B Total Canadian LNG capex across 7 projects | 11 mtpa Alaska LNG preliminary HOAs secured | 2031 Alaska LNG targeted full commercial ops |
Canada’s Structural Advantages Over Alaska
Shipping distance: LNG tankers from Kitimat reach North Asia in approximately 10 days — similar to Alaska’s Nikiski terminal. Both decisively beat U.S. Gulf Coast terminals, which require a month-plus journey including Panama Canal transit. A Japanese company paid $4 million above normal canal fees in 2023 simply to move up in the queue.
Feedgas cost: Canada’s LNG Canada sources gas from the Montney Formation — one of the richest and lowest-cost natural gas plays in North America. Alaska’s North Slope gas requires an 807-mile, $12 billion pipeline before a single molecule reaches the liquefaction terminal. That pipeline cost is embedded in every LNG price Alaska offers to Asia.
Asian ownership stakes: PetroChina (15%) and Korea Gas Corporation (5%) are consortium members. Tokyo Gas and Toho Gas signed 13- and 15-year purchase commitments with Mitsubishi, another LNG Canada partner. Asian utilities buying from LNG Canada are, in part, buying from themselves.
First-mover advantage: LNG Canada is already shipping cargoes. Alaska LNG’s commitments from Tokyo Gas, JERA, CPC, POSCO, and PTT are heads of agreement, not binding signed contracts. The Japan Gas Association has noted that private Japanese companies — not government officials — make LNG procurement decisions, and that project costs and economic certainty come first.
“Alaskans should consider the likelihood that Asian markets might prefer Canada LNG over Alaska LNG. With Canada LNG, those countries have ownership interests in an operating investment.”
— Joe Paskvan, former Alaska State Senator, January 2026Head-to-Head: Canada vs. Alaska LNG
| Factor | LNG Canada (Kitimat, B.C.) | Alaska LNG (Nikiski, AK) |
|---|---|---|
| Status | Operational — first cargo June 2025 | Development — FID not yet reached |
| Export Capacity | 14 mtpa (Phase 1) / up to 28 mtpa with Phase 2 | 20 mtpa targeted |
| Total Project Cost | ~$40 billion (committed) | $44B+ est.; real costs may exceed $70B |
| Pipeline Required | Coastal GasLink: 670 km (complete) | 807-mile AK pipeline: ~$12B, starting 2026 |
| Feedgas Source | Montney Formation — low-cost, abundant | North Slope — vast but stranded & costly |
| Asian Equity Partners | PetroChina (15%), Korea Gas (5%), Mitsubishi (15%) | No equity partners yet; HOAs only |
| Binding Asian Contracts | Long-term commitments with Japanese utilities | Preliminary HOAs only — no binding deals |
| GHG Profile | ~60% below global LNG average | Under review; Arctic construction adds complexity |
| Federal Support | Govt fast-tracked via Major Projects Office | Trump admin priority; $30B loan guarantees |
Canada Is Not Standing Still
British Columbia has become the epicenter of a second wave of LNG development that, if fully realized, would flood the Pacific market with Canadian supply before Alaska’s first LNG cargo is ever loaded.
LNG Canada Phase 1 — Kitimat
Both trains operational. Shell-led consortium. 14 mtpa capacity. Shipping to Japan, South Korea, China, and Taiwan. Phase 2 expansion to 28 mtpa under consideration.
Woodfibre LNG — Near Squamish, B.C.
Under construction. 0.3 Bcf/d export capacity. Operated using hydroelectric power, giving it one of the lowest carbon intensities of any LNG project globally.
Cedar LNG — Kitimat (Floating)
FID reached June 2024. Floating LNG facility backed by the Haisla Nation. 0.39 Bcf/d capacity, adding 3 mtpa alongside LNG Canada — and signaling deepening Indigenous partnership in Canadian LNG.
Ksi Lisims LNG — Pearse Island, B.C.
Nisga’a Nation-backed project, 12 mtpa capacity, added to Canada’s Major Projects Office fast-track roster by Prime Minister Carney in late 2025.
LNG Canada Phase 2
Would double Kitimat capacity to 28 mtpa. No FID yet, but environmental approvals already in place. CEO has described the case for expansion as “very strong.”
Canada’s Energy Regulator has authorized 18 LNG export projects with a combined 29 Bcf/d of potential capacity. Even if only a fraction are built, Canada will be a dominant Pacific LNG supplier through the 2030s — precisely the decade Alaska is targeting for market entry.
Alaska’s Case — Still Alive, But Narrow
Scale and market diversification: Alaska LNG’s 20 mtpa target exceeds LNG Canada’s current Phase 1 capacity. At that volume, Alaska could serve multiple Asian markets simultaneously. Glenfarne CEO Brendan Duval has argued that Alaska LNG is “naturally competitive” independent of geopolitical factors.
The Panama Canal problem: Alaska’s Nikiski terminal offers a slight 5-to-6-day shipping edge to North Asia. More importantly, both Pacific-coast suppliers avoid the Panama Canal entirely — and with canal bottlenecks and drought constraints growing, Pacific supply commands a resilience premium Gulf Coast LNG cannot match.
The tariff wildcard: U.S. tariff policy under the Trump administration has created new demand for Alaska LNG. Japan, South Korea, and Taiwan are weighing equity stakes partly as a mechanism to soften trade tensions with Washington. Treasury Secretary Scott Bessent confirmed these discussions in 2025.
Federal loan guarantees: Alaska LNG is eligible for approximately $30 billion in federal loan guarantees — substantially derisking the project’s debt financing in a way no Canadian LNG project can replicate.
The honest assessment, however, is sobering. Alaska LNG has not secured a single binding commercial contract with an Asian buyer. ExxonMobil, BP, and ConocoPhillips have all withdrawn at various points, citing cost concerns. The $44 billion cost estimate dates to 2023; informed observers suggest $70 billion would be a more realistic floor.
The Gazprom Thread: How 2006 Still Echoes
The 2006 post identified Gazprom’s maneuvering through Canada as a strategic threat to Alaska. Russia’s invasion of Ukraine in 2022 dramatically restructured global LNG markets — collapsing European dependence on Russian pipeline gas and creating a surge in LNG demand that accelerated construction timelines across North America, including LNG Canada.
Ironically, Russia’s aggression did for Canadian LNG what decades of Alaskan advocacy could not: it created an urgent, politically-backed global appetite for Western supply alternatives. Canada crossed the finish line. Alaska is still building the starting blocks.
What the original post warned — that Gazprom was targeting the Kitimat market and that Canadian LNG was bad news for Alaska’s Pacific ambitions — proved entirely correct in structure, even if the mechanism differed. Russia’s energy weaponization did not capture Kitimat; it accelerated it.
The Verdict:
Canada Won Round One
The 2006 warning that Canadian LNG deals were “bad news for Alaska LNG supporters” understated the case. Canada has not merely competed with Alaska for Pacific market share — it has lapped it. LNG Canada is operational. Cedar LNG and Woodfibre LNG are under construction. Ksi Lisims is on the federal fast track. Alaska is still finalizing its engineering study.
This does not mean Alaska LNG is dead. The project’s scale, its stranded-gas economics, and the geopolitical tailwind from Asian allies seeking to balance trade relationships with Washington give it a credible path forward. Glenfarne has moved faster in 2025 than any Alaska developer in memory.
But the window is narrowing. If Alaska LNG reaches full export operations in 2031 as targeted, it will enter a Pacific market already served by at least 14–17 mtpa of Canadian capacity, with more on the way. It will arrive not as the pioneer it once hoped to be, but as the late entrant. Thomas Lamb’s 2006 instinct was right: Canada’s moves matter enormously to Alaska’s gas future. In 2026, they matter more than ever.
Thomas A. Lamb · Energy Analysis · Original Post: July 21, 2006 · Expanded Analysis: 2026
Sources: LNG Canada, Alaska Beacon, Globe & Mail, U.S. EIA, Glenfarne Group, Alaska Landmine, CNBC, Global Energy Monitor
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