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Canada is ramping up liquefied natural gas (LNG) exports to diversify from US markets and counter trade risks linked to Trump’s tariffs, reported Jamie Smyth and Ilya Gridneff in the Financial Times. LNG Canada, a CAD40bn ($29bn) project in Kitimat backed by Shell and Asian partners, began exports to Asia, aiming to position Canada as a global energy leader. Prime Minister Mark Carney supports more infrastructure and regulatory reform to unlock further LNG growth while balancing environmental concerns and Indigenous rights. Despite obstacles such as high costs and past project failures, some First Nations are now backing projects with equity stakes. Canada faces fierce competition from the US and a volatile global market. (Financial Times)
Why does this matter? Canada’s bid to become an energy superpower is reshaping the global map of energy security. With its vast natural gas reserves, political stability and proximity to Asia, Canada offers a credible, long-term alternative to more volatile producers.
For Rio Tinto, Canada’s strategic pivot matters directly. The company operates the Diavik diamond mine and holds interests in aluminium production through Rio Tinto Aluminium Canada. The shift could improve energy reliability and cost profiles for industrial users. Additionally, Canada's push to develop critical minerals such as lithium, copper and nickel could unlock new project pipelines. However, evolving regulatory expectations and Indigenous consultation norms mean project design and engagement models will need to be forward-looking and partnership-driven.
For countries such as Japan, increasingly exposed to geopolitical risk and supply chain uncertainty, Canadian LNG provides faster, more reliable access to energy. Mitsubishi Corporation will begin importing LNG from Canada’s project in Kitimat, marking Japan’s first major Canadian LNG delivery. With rising geopolitical risks and declining output from key suppliers such as Australia, Japan is seeking more stable, nearby sources. Canadian LNG offers quicker, more secure shipping and long-term supply reliability. Mitsubishi’s stake secures up to 2.1 million mt annually, helping meet Japan’s growing energy demand driven by data centres and limited nuclear restarts. The move supports Japan’s energy security strategy while strengthening ties with Canada amid global supply chain pressures.
Momentum is building for further infrastructure expansion. Prime Minister Carney stated that a new oil pipeline to British Columbia is “highly likely” to be included among projects deemed of national importance. Speaking at the Calgary Stampede, he emphasised that any proposal must come from the private sector. Carney also endorsed a CAD16.5bn carbon capture initiative for Alberta’s oil sands. His comments follow a recent Senate bill to accelerate approval of major resource projects.
In tandem, Canada's Energy Minister Tim Hodgson announced plans to fast-track Projects of National Interest via a new Major Federal Projects Office, streamlining permits under a “One Project, One Review” approach. The initiative aims to reduce red tape and ensure decisions within two years. The government will also invest in scalable clean energy sources such as hydrogen, geothermal, biofuels, renewables and nuclear. A national east-west transmission strategy is being pursued to build an integrated electricity grid, boosting domestic power reliability and enabling energy exports between provinces.
Canada’s LNG push marks a strategic shift toward energy diversification, attracting support from Indigenous groups, industry and global partners such as Japan. With political backing and regulatory reform, the country is positioning itself as a reliable supplier in a volatile world. For companies including Rio Tinto and Mitsubishi, this unlocks new opportunities in energy, critical minerals and industrial growth.
https://www.woodmac.com/press-releases/key-energy-takeaways-from-canadas-2025-election/
P5
- Collaboration with other countries e.g. EU
https://energy.ec.europa.eu/news/eu-canada-high-level-energy-dialogue-2025-03-11_en
Japan importing LNG -
Questions
- How does this link to other emerging trends?
- What are the opportunities and challenges for Rio Tinto?
- What is the energy profile of the country?
- Why does Canada matter for the world