LNG Canada Phase 2 FID: Module Orders for Offshore Oil Engineering (600583.SH)

LNG Canada's partners took a final investment decision on Phase 2 of the export plant on September 29, 2026, doubling capacity from 14 to 28 million tonnes per year, according to the joint venture's announcement.[1] The Phase 2 FID could bring a repeat module-fabrication order to Offshore Oil Engineering (600583.SH), the Chinese yard group that built most of Phase 1's modules.

What LNG Canada announced

The joint venture partners are Shell, PETRONAS, PetroChina, Mitsubishi Corporation and KOGAS.[1] The Prime Minister of Canada's office called it a C$33 billion private-sector investment.[2]

Phase 2 adds two liquefaction trains and one LNG storage tank, under a contract that is primarily lump-sum turnkey.[5] The contractor is a 50/50 joint venture of JGC and Fluor, with a scope covering engineering, procurement, fabrication, construction and commissioning.[3][4] Fluor said it will add its US$7.5 billion share to backlog.[3]

Feed gas comes from the Montney Formation in British Columbia through the Coastal GasLink pipeline.[1] The pipeline carries about 2.1 Bcf/d today. Its Phase 2 adds compressor stations to nearly double capacity, with construction expected to start in early 2027.[6]

Background: how a modular LNG plant gets built

An LNG export plant is built around liquefaction lines, or "trains," that cool pipeline gas into a liquid for shipping overseas.

A plant can be built piece by piece on site, or modularly: pipework, equipment and steel structures are prefabricated into complete "modules" at large fabrication yards, then shipped to site and assembled.

LNG Canada Phase 1 was built modularly. It used 215 modules, and the last one arrived from a fabrication yard in Zhuhai, China.[7]

Most of those modules came from Offshore Oil Engineering (COOEC). Its Qingdao yard built 35 modules, including all 19 core process modules.[8] The Zhuhai yard built 157 outside-battery-limits (OSBL) modules weighing about 108,000 tonnes in total.[9] At the time, the Zhuhai yard was a joint venture between COOEC and Fluor.

COOEC signed the module-fabrication contract with the JGC-Fluor joint venture in March 2019, worth about CNY 5 billion.[10] In April 2026, COOEC completed the purchase of Fluor's 49% stake in the Zhuhai joint venture, taking its ownership to 100%.[11][12]

From the Phase 2 EPC award to Chinese module yards

First, with FID taken, the JGC-Fluor joint venture moves into execution, with fabrication in its scope.[3]

Second, Phase 2 adds two more trains of the same kind beside Phase 1, under the same contractor. If it reuses Phase 1's design and module split, the contractor may go back to the yards it used for Phase 1.

Third, a module order for COOEC would show up first as a new contract, then as fabrication revenue over 2027-2029.

A weaker link runs upstream. Phase 2 needs more Montney gas, but Shell completed its acquisition of local producer ARC Resources in September and can partly supply itself.[15] That effect would only appear once Phase 2 starts up in the early 2030s.

Company that could be affected

Offshore Oil Engineering (600583.SH) is the engineering arm of the CNOOC group. It designs, fabricates and installs offshore oil and gas platforms and large modules. In 2025 it reported revenue of CNY 27.16 billion and net income of CNY 2.084 billion.[14]

It sits at the module-fabrication link; new orders, backlog and fabrication revenue from 2027 could benefit.

Using the estimate in the research materials: the Phase 1 core-module contract was about CNY 5 billion over about 33.5 months, or roughly CNY 1.8 billion a year.[10] If the Phase 2 core modules are also about CNY 5 billion over three years, that is about CNY 1.7 billion a year, or about 6.3% of 2025 revenue. At a 7.7% net margin, that is about CNY 130 million a year in profit, or about 6% of 2025 net income.[14]

If the Zhuhai OSBL modules also go to COOEC again, the effect could rise to 8%-10%. This is an estimate, not a company disclosure. No Phase 2 yard award has been announced, and the outcome depends on whether the joint venture gives the order to COOEC.

On September 29, COOEC closed at CNY 6.53, up 0.5% from CNY 6.50 the previous session, while the SSE Composite rose 0.2%. The stock is up 6.0% over one month and 23.2% over one year, with a market capitalization of about CNY 27 billion.[13]

What to watch

The most direct signal would be an SSE announcement by COOEC of a module-fabrication contract with the JGC-Fluor joint venture or LNG Canada Phase 2. The Phase 1 module contract was signed about five months after FID. On that timeline, the window to watch is October 2026 to March 2027.[10]

Next, watch the contractors: Fluor reports third-quarter results in early November; check whether the US$7.5 billion enters backlog and whether it discloses Phase 2 fabrication plans or yard locations.[3] JGC reports first-half results in November; check new orders and its execution plan.

Longer term, check whether COOEC's 2027 new orders and overseas revenue exceed 2025-2026 levels.

The chain breaks if any of the following happens: Phase 2 modules go to other yards in Korea, Thailand or Indonesia, or are built in Canada under a local-content push; Canada-China trade friction puts tariffs on Chinese-fabricated steel modules and forces fabrication outside China; Phase 2 is built on site rather than modularly; or JGC or Fluor disclose cost overruns or charges on Phase 2, since the lump-sum turnkey risk sits mainly with them.

This article identifies possible transmission chains that may be overlooked. It is not a stock recommendation.

Sources

[1] BOE Report (JV release reprint) · 2026-09-29 · Phase 2 FID · https://boereport.com/2026/09/29/lng-canada-announces-phase-2-final-investment-decision/ [2] Prime Minister of Canada · 2026-09-29 · Release on Phase 2 · https://www.pm.gc.ca/en/news/news-releases/2026/09/29/prime-minister-carney-welcomes-lng-canada-phase-2-second-largest [3] Fluor release · 2026-09-29 · JV selected for Phase 2 · https://www.wboc.com/online_features/press_releases/fluor-joint-venture-selected-for-lng-canada-phase-2-expansion-following-final-investment-decision/article_960d8220-2227-5e25-9848-4706f23ae4c9.html [4] Hydrocarbon Processing · 2026-09-29 · JV ownership · https://www.hydrocarbonprocessing.com/news/2026/09/update-fluor-jv-selected-for-lng-canada-phase-2-expansion-following-fid/ [5] Offshore Energy · 2026-09-29 · Contract scope · https://www.offshore-energy.biz/2026/09/29/next-chapter-of-shells-canadian-lng-project-brings-fluor-jgc-jv-multibillion-dollar-award [6] Coastal GasLink release · 2026-09-29 · Pipeline Phase 2 · https://www.globenewswire.com/news-release/2026/09/29/3370625/0/en/coastal-gaslink-phase-2-to-proceed-following-lng-canada-final-investment-decision.html [7] Fluor newsroom · 2023-07-18 · Last Phase 1 module · https://newsroom.fluor.com/news-releases/news-details/2023/Fluor-Reaches-Significant-Milestone-on-LNG-Canada-Project/default.aspx [8] Sohu · 2023-03 · COOEC Qingdao modules · https://www.sohu.com/a/651249815_121123881 [9] Nanfang+ · 2023-05-29 · Zhuhai OSBL modules · https://static.nfnews.com/content/202305/29/c7735022.html [10] Tianfeng Securities · 2019-09-14 · COOEC initiation report · https://img3.gelonghui.com/pdf/1e8fb-7e90d8d8-37b0-4bfc-b1a0-099679a8470a.pdf [11] COOEC Announcement 2026-012 · 2026-04-01 · Zhuhai JV buyout · https://www.cnoocengineering.com/english/InvestorRelations/Announcements/202604/P020260410576912481984.pdf [12] Fluor Q2 2026 10-Q · 2026-08-07 · Sale of CFHI stake for US$124 million [13] Drillr market data · 2026-09-29 · COOEC prices and market cap [14] Drillr financial data · 2026-09-29 · COOEC FY2025 revenue and net income [15] GlobeNewswire · 2026-09-02 · Shell completes ARC Resources deal · https://www.globenewswire.com/news-release/2026/09/02/3355547/0/en/shell-completes-acquisition-of-arc-resources.html