Shell plc and Mitsubishi Corp are evaluating sale options for their respective stakes in the C$40 billion LNG Canada project, a major liquefied natural gas facility on Canada’s west coast. Shell holds a 40% interest, while Mitsubishi owns 15%. Both companies have engaged investment banks—Shell with Rothschild & Co. and Mitsubishi with RBC Capital Markets—to assess potential buyers and valuation ranges.
Shell’s move aligns with its broader portfolio‑optimization strategy, which seeks to free up capital for higher‑return investments and shareholder returns. The company estimates that a sale of its 40% stake could fetch roughly US$15 billion, covering equity, debt, and future capital commitments for later phases of the project. This proceeds would provide Shell with flexibility to accelerate other LNG projects, invest in renewable gas, or return capital to shareholders.
Mitsubishi’s exploration of a sale comes shortly after it announced a US$5.2 billion acquisition of U.S. shale gas assets. The timing suggests a shift in capital allocation priorities, with the company potentially reallocating resources from the Canadian project to its expanding U.S. portfolio. The sale could also allow Mitsubishi to streamline its LNG exposure while maintaining a strategic foothold in the Pacific market.
LNG Canada began production in June 2025, but the facility has faced operational hiccups, notably a shutdown of the Train 2 processing unit in December that limited output. Coupled with growing concerns about global LNG oversupply—driven by new projects coming online—market participants are cautious about the valuation of the asset. These factors are likely to influence the price that buyers are willing to pay.
The project’s expansion plans add another layer of complexity. Mitsubishi has expressed interest in doubling LNG Canada’s capacity, which would require a final investment decision (FID) for Phase 2. A sale of Shell’s stake could accelerate or delay that timeline, depending on the buyer’s strategic objectives. Analysts note that while the Pacific‑coast location offers a competitive advantage for Asian markets, the oversupply environment may dampen the premium buyers are willing to pay.
Strategically, a divestiture would reshape the North American LNG landscape. For Shell, it would reduce exposure to a single large asset and free capital for diversification. For Mitsubishi, it could signal a pivot toward U.S. shale and a more focused LNG portfolio. The outcome will have implications for supply chains, pricing dynamics, and the competitive positioning of both companies in the global LNG market.
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