Blackstone leads consortium to invest US$3.1 billion in LNG Canada

The Zhitong Finance App learned that an investor consortium led by Blackstone Group has agreed to buy part of the shares in the Canadian LNG Canada (LNG Canada) liquefaction business from a subsidiary of Mitsubishi Corporation for 3.1 billion US dollars. Investors involved in the transaction also included the Canada Pension Plan Investment Board, the Ontario Municipal Employee Retirement System, the Ontario Investment Management Company, and the Public Sector Pension Investment Board. The transaction involved a 49.9% stake in the LNG Canada business held by a Mitsubishi subsidiary.

Mitsubishi Corporation is one of Japan's largest suppliers of liquefied natural gas. According to a statement released on Monday, the company will remain the holding partner and retain its full share of the LNG offtake.

Since the Iran war, energy transportation in the Strait of Hormuz has been blocked, prompting LNG importers to seek supply sources outside the Middle East. Meanwhile, Canadian Prime Minister Mark Carney has eased environmental restrictions and embraced traditional energy development more actively than his predecessor, Justin Trudeau.

Shell holds 40% of LNG Canada's shares, and Mitsubishi holds 15%. LNG Canada is Canada's first and only large-scale LNG export terminal. In September of this year, investors led by Shell approved plans to double export capacity to 28 million tons per year. The project partners have been seeking to sell part of their shares to finance the expansion.

Blackstone President Jon Gray called Canada an “sleeping economic giant” at an investment summit held in Toronto in September this year. He said that Canada's natural resources, more relaxed regulatory policies, and the availability of private capital have provided the country with huge opportunities for growth.

“This announcement is based on our strong belief in Canada, partnerships with leading Canadian institutional investors, and our ability to provide large businesses with flexible solutions to help them unlock the value of their critical assets,” Zachary Rubinstein, managing director of Blackstone's credit and insurance business, said in a statement.

Kuroishi provided this equity investment through its credit and insurance business. The asset management company, which has assets under management of nearly $1.4 trillion, refers to such deals as “enterprise solutions.”

In August of this year, Blackstone announced a 2.5 billion Canadian dollar (approximately $1.8 billion) minority investment in Air Canada's loyalty program, Aeroplan Inc. Blackstone also co-led an investment of USD 5.34 billion in Williams's power plant with Apollo Global Management and KKR & Co. and supported Rogers Communications's wireless network infrastructure with $7 billion last year.