Shell Highlights AECO Advantage in LNG Canada as Exports Near Launch

Shell CEO Wael Sawan emphasized the strategic advantage of the LNG Canada project due to its use of the Canadian AECO natural gas price index, which is significantly lower than the U.S. Henry Hub benchmark. Speaking at the Energy Asia conference in Kuala Lumpur on Tuesday, Sawan noted that AECO indexation makes the project especially attractive in today’s global energy landscape.

“The differential between AECO and Henry Hub, combined with the project’s proximity to Asia, enhances its competitiveness,” Sawan said. He also pointed out that increased supply of AECO-linked gas and LNG Canada’s low carbon footprint contribute to its long-term value.

As of Monday, AECO gas was priced at 96.6 Canadian cents (approximately 71.4 U.S. cents) per million British thermal units (MMBtu), significantly lower than the $3.746 per MMBtu Henry Hub futures price, according to SNL Financial.

LNG Canada, a joint venture involving Shell, Petronas, PetroChina, Mitsubishi Corporation, and Korea Gas, is Canada’s first major LNG export facility. The project is expected to produce 14 million metric tons per annum (MTPA) of liquefied natural gas, with first shipments anticipated this month.

The project's location on Canada’s west coast offers a shorter shipping route to Asia compared to U.S. Gulf Coast LNG exporters, providing additional cost and emissions advantages. Shell’s focus on AECO pricing and the facility’s low-carbon design aligns with growing demand for cleaner, more affordable energy in Asia.

With global LNG demand rising, Shell’s LNG Canada project is positioned as a cost-effective and environmentally responsible option for buyers seeking long-term supply. The project highlights Canada’s potential to become a key player in the global LNG market.