Blackstone leads $3.1B LNG Canada stake deal

Blackstone, through funds managed by Blackstone Credit & Insurance, has agreed to invest $3.1 billion alongside leading Canadian institutional investors to acquire a 49.9% non-controlling interest in a Mitsubishi Corporation subsidiary that holds Mitsubishi’s interest in the LNG Canada liquefaction business. The transaction gives the investor group nearly half of the economic interest in the subsidiary while leaving operational control and LNG offtake rights with Mitsubishi.

The consortium’s investment is focused specifically on the liquefaction business of LNG Canada, Canada’s first and only large-scale liquefied natural gas export terminal.

The Blackstone-led investor group includes Canada Pension Plan Investment Board, through wholly owned subsidiaries of CPPIB Credit Investments Inc., Ontario Municipal Employees Retirement System, the Investment Management Corporation of Ontario and the Public Sector Pension Investment Board. These institutions participate as key financing partners in the 49.9% non-controlling interest acquisition.

A representative from CPP Investments described LNG Canada as a high-quality, globally strategic asset with strong long-term fundamentals and attractive return potential for the CPP Fund, and characterized the transaction as a scaled investment opportunity in Canada alongside Mitsubishi, Blackstone and Canadian peers.

LNG Canada is Canada’s first and only large-scale LNG export terminal.

The project is one of Canada’s most significant energy projects and is intended to help meet rising energy demand in global markets through increased LNG export capability. The new investment provides financial support for the continued build-out of this infrastructure.

Mitsubishi Corporation, identified as one of Japan’s largest LNG suppliers, will remain the controlling partner in the subsidiary that holds the LNG Canada interest. The transaction does not alter Mitsubishi’s rights to LNG volumes, as it will retain its full share of LNG offtake from the project.

By keeping control and offtake while selling a 49.9% non-controlling interest, Mitsubishi gains capital from the Blackstone-led group while preserving strategic benefits from LNG Canada’s production.

Blackstone notes that its Infrastructure and Asset Based Credit platform manages $140 billion and employs more than 100 investment professionals, forming one of the larger platforms in the asset-backed investment market. Over the past two years, it has announced several large-scale corporate solutions investments in Canada and in critical energy infrastructure globally, including multi-billion-dollar commitments to telecommunications, loyalty programs, oil and gas partnerships and LNG projects.

Goldman Sachs served as lead structuring agent and financial advisor to Blackstone on the LNG Canada transaction, with Scotiabank also acting as financial advisor. Legal counsel to Blackstone was provided by Kirkland & Ellis and Stikeman Elliott, supporting the execution of the $3.1 billion deal structure.