Partners in Shell-led LNG Canada could reach a final investment decision on a 14 million metric tons per annum Phase 2 expansion as early as October, according to three people familiar with the matter. The project would add 14 million tons of annual production capacity at the Kitimat, British Columbia, terminal and double total capacity to 28 million tons. Shell said it is working with its joint venture partners on a potential expansion and is targeting an investment decision by year-end, subject to each partner independently satisfying commercial, financial, regulatory and governance requirements. Interest in new LNG supply is rising as Asian buyers prioritize security amid Middle East conflicts, Red Sea shipping disruptions and uncertainty around energy transport through the Strait of Hormuz. Global supply tightness, producer outages and demand growth from countries replacing coal with natural gas are also supporting new projects. LNG Canada is backed by Shell, Petronas, PetroChina, Mitsubishi Corporation and Korea Gas Corporation. Its Pacific Coast location offers shorter routes to Asian markets than U.S. Gulf Coast terminals that require passage through the Panama Canal. Phase 1 cost about C$40 billion, is designed to produce 14 million tons annually from two processing trains and shipped its first LNG cargo earlier this year. MNT Investments LP, representing five neighboring First Nations, has an option to invest up to C$1 billion in Phase 2. If approved, the expansion would increase supply to Asian markets from the late 2020s into the early 2030s, although government energy policy and carbon regulations could affect its timing.