Blackstone and Canadian Investors Acquire $3.1 Billion Stake in Mitsubishi LNG Unit

Blackstone and four Canadian institutional investors have signed a US$3.1-billion deal to acquire a non-controlling stake in a Mitsubishi Corp. subsidiary that holds an interest in LNG Canada, according to reports from bnnbloomberg.ca and OilPrice.com.

Transaction Details

The investor group includes the Canada Pension Plan Investment Board (CPP Investments), the Ontario Municipal Employees Retirement System (OMERS), the Investment Management Corp. of Ontario (IMCO), and the Public Sector Pension Investment Board (PSP Investments). The group is acquiring a 49.9 per cent interest in the Mitsubishi unit.

According to a press release from Mitsubishi Corporation, the transaction to buy into the Mitsubishi subsidiary is valued at approximately US$1.6 billion. The total $3.1-billion investment includes the costs of planned capital expenditures for the Phase 2 expansion project of the LNG Canada facility.

LNG Canada Project Overview

LNG Canada is a joint venture between Shell, PetroChina, Malaysia’s Petronas, Japan’s Mitsubishi Corp. and South Korea’s KOGAS. The facility is located in Kitimat, B.C.

• Current Capacity: 14 million tonnes per annum (mtpa).
• Phase 2 Expansion: The expansion aims to double the facility's capacity to 28 million tonnes a year.
• Mitsubishi's Role: Mitsubishi holds a 15 per cent interest through its subsidiary and will retain its full share of the plant’s LNG supply.

Stakeholder Perspectives

Blackstone Credit & Insurance described the deal as a way to "provide large corporates with flexible solutions to unlock value from their most critical assets," according to a Mitsubishi press release.

Rick Campbell, senior managing director at Blackstone Credit & Insurance, called LNG Canada "one of Canada’s most significant energy projects," adding it will "help meet rising energy demands across global markets."

Geoff Souter, managing director at CPP Investments, stated in a news release that "LNG Canada is a high-quality, globally strategic asset with strong long-term fundamentals and attractive return potential for the CPP fund."

Environmental groups have expressed opposition to the investment. Richard Brooks, climate finance director at Stand.earth, said Canadians should be "extremely alarmed" to see pension funds investing in LNG. He stated, "The bottom line is that every dollar of workers’ pensions put into LNG Canada is a dollar not building the clean energy future."

Adam Scott, director of Shift Action for Pension Wealth and Planet Health, said the pension funds have "broken trust with their members," adding, "We’re now using our taxes and our retirement savings against us to harm our climate."

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Sources

• bnnbloomberg.ca: Investors buy into Mitsubishi subsidiary tied to LNG Canada
• oilprice.com: Blackstone-Led Investors Buy into LNG Canada for $3.1 Billion | OilPrice.com
• pensionpulse.blogspot.com: Blackstone, Canadian Pension Funds Invest US$3.1B in LNG Canada Stake
• alternativeswatch.com: Blackstone, Canadian pensions invest $3.1bn in Mitsubishi LNG stake - Alternatives Watch

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.