PetroChina weighs multibillion-dollar LNG Canada stake sale

PetroChina Ltd. is exploring the sale of its 15% stake in LNG Canada Development, a holding that could be valued at several billion dollars, to help finance the project's second-phase expansion that would double production capacity, according to people familiar with the matter.

"The stake sale reflects PetroChina's need to recycle capital into the phase 2 expansion while maintaining strategic access to Canadian LNG," said a person familiar with the company's thinking, asking not to be identified discussing private deliberations.

The Beijing-based oil and gas giant is working with advisers to gauge market appetite for the stake, which may also be reduced through several smaller transactions, the people said. LNG Canada, located in Kitimat, British Columbia, began exports from its first-phase facilities last year. The original $31 billion investment agreement was reached in 2018 among partners including Shell PLC, Mitsubishi Corp., Petroliam Nasional Bhd. and Korea Gas Corp.

The divestiture comes as LNG Canada has become an important alternative supply source for China after supply disruptions in Qatar caused by Middle East conflicts. Phase 2 would double the project's capacity, adding to a wave of North American LNG expansion that includes Sempra's $14 billion Port Arthur LNG project in Texas and Venture Global's Louisiana expansion, as investors pour capital into gas infrastructure to meet growing demand from Asian economies and AI-driven power needs.

Capital recycling strategy

PetroChina's potential exit from a portion of its LNG Canada stake mirrors a broader trend among Chinese state-owned energy companies seeking to optimize capital allocation. The company may gradually reduce its holdings through several smaller transactions rather than a single block sale, the people said, a structure that could attract a wider pool of buyers including infrastructure funds and Asian utilities seeking long-term LNG offtake rights.

The sale also highlights the growing value of Canadian LNG assets as global buyers diversify supply away from the Middle East. Since LNG Canada's first cargoes began flowing last year, the project has emerged as a critical bridge between North American gas reserves and Asian demand centers, with shipping times to Japan and South Korea roughly half those from the Gulf Coast.

North American LNG buildout accelerates

The expansion plans at LNG Canada align with a broader surge in North American LNG investment. KKR & Co. and Blackstone Inc. are jointly investing $17 billion in Sempra's LNG infrastructure, including a 49.9% stake in the Port Arthur LNG export terminal's second phase. Sempra made a final investment decision on the $14 billion expansion in July 2025 and signed a construction contract with Bechtel Energy.

Venture Global LNG Inc. has also awarded Baker Hughes a contract for six liquefaction blocks at its Louisiana expansion, adding 12 modules of capacity. The wave of projects reflects investor confidence that US and Canadian LNG exports will underpin global energy growth for decades, particularly as Asian economies expand and data center power demand surges.

For PetroChina, the stake sale would provide capital to fund its share of LNG Canada's phase 2 costs while maintaining a presence in a project that gives China direct access to Canadian gas. The company's advisers are expected to begin approaching potential buyers in the coming weeks, the people said.

This article is for informational purposes only and does not constitute investment advice.