*

First LNG expected to be produced in Canada on the weekend

*

LNG Canada expected to operate initially at 25% capacity

*

LNG tanker on the way to collect first cargo from new

plant

By Curtis Williams

HOUSTON, June 18 (Reuters) - Canada could produce its

first ever liquefied natural gas this weekend, from the LNG

Canada export facility in Kitimat, British Columbia, two people

familiar with the startup of the plant told Reuters on

Wednesday.

The facility, the first of a handful of Canadian LNG

projects to begin production, will be the first LNG facility in

North America with direct access to the Pacific coast,

significantly reducing sail time to Asian markets.

When fully operational it will have a capacity to export 14

million metric tonnes per annum (mtpa), according to company

statements.

"We began cooling down Train 1 on Monday and as long as

there is no unforeseen difficulty we expect to produce LNG six

days from Monday. So I would say between Saturday and Sunday we

can expect first LNG," one of the people familiar with the

startup told Reuters.

Cooldown of Train 1 is expected to continue until Thursday

June 19 and extensive flaring is expected, LNG Canada told staff

in a memo last Friday.

First LNG will be produced from Train 1, with first LNG

cargoes by the middle of this year, LNG Canada told Reuters on

Tuesday.

Only a portion of the processing plant will be operating

this weekend, according the two sources.

Train 1 which has a capacity of 6.5 mtpa, or half of the

total output of LNG Canada, has had difficulties with one of its

lines and it will only produce at half its capacity until it is

able to solve the problem, one of the two sources told Reuters.

LNG Canada did not comment on the production challenges.

LNG tanker Gaslog Glasgow is on its way to LNG Canada's

Kitimat port, according to LSEG ship tracking data. The vessel

is expected to arrive on June 29 and will be loaded with LNG,

the people said.

It is now seven years since the partners, Shell Plc ( SHEL )

, Petronas , PetroChina,

Mitsubishi Corporation ( MSBHF ) gave the project a

financial go ahead.

Once LNG Canada enters service, Canadian gas exports to the

U.S. will likely decline, traders said, as Canadian energy firms

will have another outlet for their fuel and will sell more to

other countries. For now, the U.S. is the only outlet for

Canadian gas.

Canada exported about 8.6 billion cubic feet per day (bcfd)

of gas via pipelines to the U.S. in 2024, up from 8.0 bcfd in

2023 and an average of 7.5 bcfd over the prior five years

(2018-2022), according to data from the U.S. Energy Information

Administration. That compares with a record 10.4 bcfd in 2002.