Shell's Canadian LNG Facility Fails to Boost Gas Prices

Shell's new LNG facility in Canada has not yet impacted Western Canadian natural gas prices, which remain at $1.10 per million British thermal units. Wall Street analysts predict a 5.98% upside for Shell PLC with a target price of $76.63, and the company's current performance is rated as "Outperform" by brokerage firms.

The recent start-up of Shell's LNG Canada facility in British Columbia has not yet had a significant impact on Western Canadian natural gas prices. Despite the facility's potential to bring 2.1 billion cubic feet per day (bcfd) of new gas demand to the region, prices at the Alberta Energy Company (AECO) storage hub remain low, hovering around $1.10 per million British thermal units (mmBtu). This is approximately a third of the value of the U.S. Henry Hub benchmark price, according to LSEG data [1].

The delayed impact on prices can be attributed to a persistent supply glut and the gradual ramp-up of the facility. Shell-led SHEL LNG Canada shipped its first cargo of 70,000 metric tons from the country's Pacific coast on June 30, but the facility is operating below its design capacity due to a problem with one of the lines at Train 1. Repairs are underway, and production is expected to increase over the next three weeks, putting full output closer to the end of August [1].

The extended downturn in gas prices has weakened companies' abilities to return capital to shareholders, and weather conditions in Western Canada this summer have contributed to the gas oversupply. The number of drilled but uncompleted wells in British Columbia's Montney gas-producing region has doubled, indicating producers are holding off bringing new wells online until prices improve [1].

Wall Street analysts predict a 5.98% upside for Shell PLC with a target price of $76.63, and the company's current performance is rated as "Outperform" by brokerage firms. However, the delayed impact of the LNG facility on gas prices may affect Shell's financial performance in the near term [1].

Shell's new LNG facility in Canada is part of a broader trend of foreign energy companies resuming exploration activities in Libya, a country that has faced years of instability following the fall of Muammar Gaddafi in 2011. Shell and BP have signed agreements with Libya's National Oil Corporation (NOC) to assess hydrocarbon potential across major oilfields, signaling a significant revival of foreign energy interest in the region [2].

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L6N3T60Q8:0-lng-canada-s-start-up-yet-to-lift-gas-prices-amid-supply-glut/
[2] https://www.nasdaq.com/articles/oil-majors-shell-and-bp-resume-energy-projects-across-libya