Key facts
- Blackstone Credit & Insurance funds partnered with CPP Investments, OMERS, IMCO and PSP Investments on the purchase.
- The stake is 49.9% of a Mitsubishi unit that holds the firm's 15% interest in LNG Canada.
- Mitsubishi said its LNG offtake volumes and customers would not be affected by the transaction.
- Phase 2 would add two trains and lift LNG Canada capacity from 14 mtpa to 28 mtpa in the early 2030s.
- Shell holds 40% of LNG Canada and will receive nearly 6 mtpa of additional LNG from the expansion.
Blackstone funds and a group of Canadian institutional investors agreed to buy a 49.9% non-controlling stake in a Mitsubishi Corporation unit that holds the Japanese firm's 15% interest in LNG Canada, for a total of $3.1 billion, Blackstone said on Monday.
The buyers are funds managed by Blackstone Credit & Insurance, working with 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.
The deal comes weeks after LNG Canada's shareholders announced the final investment decision to proceed with Phase 2 of the plant in Kitimat, British Columbia. The expansion would add two liquefaction trains and double the Shell-led project's capacity from 14 million tonnes per annum to 28 million tonnes per annum in the early 2030s.
Shell, which holds a 40% interest in LNG Canada, will receive nearly 6 million tonnes per annum of additional LNG from the expansion, the company has said. Mitsubishi said its stake will be diluted by the entry of Blackstone and the Canadian investors but that the transaction would not affect its LNG offtake volumes or customers.
Mitsubishi said it "will welcome the Funds as a financial partner in the Holdco while maintaining its participation across the natural gas and LNG value chain in Canada." LNG Canada Phase 2 was the first of five projects of national importance that Canadian Prime Minister Mark Carney proposed last year to diversify Canada's energy exports from the United States.
Shell said at the end of September that the Kitimat project is positioned to supply cost-competitive gas to Asian markets, where it expects demand for LNG to increase significantly.