Blackstone-led investors agree to acquire stake in Mitsubishi’s LNG Canada business
Blackstone Credit & Insurance and a group of Canadian institutional investors have agreed to invest US$3.1 billion to acquire a 49.9% non-controlling interest in a Mitsubishi Corporation subsidiary holding the Japanese group’s stake in the LNG Canada liquefaction business.
The investment consortium includes Canada Pension Plan Investment Board (CPP Investments), Ontario Municipal Employees Retirement System (OMERS), Investment Management Corporation of Ontario (IMCO) and Public Sector Pension Investment Board (PSP Investments). The transaction will introduce new institutional capital into Mitsubishi’s investment structure while leaving the Japanese company in control of the subsidiary.
Mitsubishi will remain the controlling partner and retain its full share of LNG offtake under the arrangement. The announcement does not indicate any change to Mitsubishi’s existing LNG purchasing entitlements or disclose a timetable for completion of the investment.
LNG Canada is Canada’s first large-scale LNG export terminal, providing a route for Canadian natural gas to reach international markets by sea. Its proposed Phase 2 expansion would double the facility’s production capacity to 28 million tonnes per annum once completed, positioning the terminal among the world’s largest LNG export facilities.
The investment comes as LNG infrastructure continues to attract long-term institutional capital, reflecting the importance of liquefaction capacity and international gas supply chains. For Mitsubishi, the agreement provides an opportunity to bring additional financial partners into its LNG investment structure while maintaining control and its existing offtake position.
“We are proud to join Mitsubishi Corporation, a global leader with more than 50 years of experience across the LNG value chain, as a financial partner to support one of Canada’s most significant energy projects,” said Rick Campbell, Senior Managing Director at Blackstone Credit & Insurance.
CPP Investments also identified the long-term characteristics of the LNG Canada business as a factor supporting its participation in the transaction.
“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.
The agreement adds to Blackstone’s involvement in large-scale infrastructure financing, including investments associated with LNG facilities and other energy infrastructure projects. Its Infrastructure and Asset Based Credit platform manages approximately US$140 billion.
Goldman Sachs acted as lead structuring agent and financial adviser to Blackstone, with Scotiabank also providing financial advice. Kirkland & Ellis and Stikeman Elliott served as legal advisers.
The companies did not disclose further details regarding the transaction’s closing conditions or how the investment proceeds will be allocated within Mitsubishi’s LNG business.
