Blackstone Leads $3.1B Investment in Mitsubishi’s LNG Canada Stake
Funds managed by Blackstone Credit & Insurance and a group of Canadian institutional investors have agreed to invest $3.1 billion for a 49.9% noncontrolling interest in a Mitsubishi Corp. subsidiary. The subsidiary holds Mitsubishi’s stake in the LNG Canada liquefaction business.
The investor group includes the Canada Pension Plan Investment Board, the Ontario Municipal Employees Retirement System, the Investment Management Corporation of Ontario and the Public Sector Pension Investment Board.
LNG Canada is Canada’s first and only large-scale liquefied natural gas export terminal. Its Phase 2 expansion will double the facility’s production capacity to 28 million metric tons a year, making it one of the world’s largest LNG facilities.
Mitsubishi, one of Japan’s largest LNG suppliers, will remain the controlling partner and keep its full share of the facility’s LNG output.
“LNG Canada is a high-quality, globally strategic asset with strong long-term fundamentals and attractive return potential for the CPP Fund,” said Geoff Souter, managing director and head of real assets credit at CPP Investments. “We see this as a compelling opportunity to invest at scale here in Canada alongside Mitsubishi Corporation, Blackstone and our Canadian peers.”
The deal extends Blackstone’s push into large corporate financing in Canada and in energy infrastructure. The firm’s infrastructure and asset-based credit platform manages $140 billion. Over the past two years, Blackstone has announced a CAD$7 billion investment in Rogers, a CAD$2.5 billion investment in Aeroplan, a $16 billion partnership with Kuwait Oil Company, a $7 billion investment in Sempra Infrastructure Partners’ Port Arthur LNG Phase 2, a $5.34 billion investment in a joint venture with Williams, and a $3.5 billion investment in a joint venture with EQT, among others.
Goldman Sachs served as lead structuring agent and financial advisor to Blackstone. Scotiabank also served as financial advisor. Kirkland & Ellis and Stikeman Elliott served as legal counsel to Blackstone.