A consortium led by Blackstone has agreed to invest $3.1bn in Mitsubishi Corporation’s interest in the LNG Canada project, according to Private Equity Wire. Blackstone-managed funds, alongside Canadian institutional investors, will acquire a 49.9% noncontrolling stake in a Mitsubishi subsidiary holding the Japanese group’s interest in the British Columbia liquefied natural gas facility, according to Private Equity Wire.
Deal structure and investors
Blackstone-managed funds and Canadian institutional investors will acquire a 49.9% noncontrolling stake in a Mitsubishi subsidiary that holds Mitsubishi Corporation’s interest in the LNG Canada project, according to Private Equity Wire. The investor group includes Canada Pension Plan Investment Board, Ontario Municipal Employees Retirement System, Investment Management Corporation of Ontario and Public Sector Pension Investment Board, according to the same report.
LNG Canada ownership and expansion plans
LNG Canada is reportedly a joint venture between Shell, Mitsubishi, Petronas, PetroChina and Korea Gas, according to Private Equity Wire. Shell reportedly holds 40% and Mitsubishi reportedly holds 15%, according to the report.
A planned second-phase expansion is expected to double annual production capacity to 28 million metric tons, according to Private Equity Wire.
Mitsubishi LNG arrangements and volumes
Mitsubishi reportedly said the investment would not affect its existing LNG offtake arrangements or customers, according to Private Equity Wire. Mitsubishi’s subsidiary currently receives 2.1 million tons annually from the project, with volumes expected to double following the expansion, according to the same report.
Private Equity Wire reported that the agreement expands Blackstone’s exposure to large-scale energy infrastructure and provides Blackstone and its institutional partners with exposure to a major North American LNG export facility, citing a report by The Wall Street Journal.
