Blackstone-Led Investors Buy into LNG Canada for $3.1 Billion

Blackstone-backed investors have acquired a 49.9% non-controlling stake in LNG Canada for a combined investment of $3.1 billion. The funds were managed by Blackstone Credit & Insurance in collaboration with prominent Canadian institutional investors, including the Canada Pension Plan Investment Board, Ontario Municipal Employees Retirement System, OMERS, IMCO, and PSP Investments.

This acquisition comes shortly after the shareholders of LNG Canada announced their final investment decision to proceed with Phase 2 of the project in Kitimat, British Columbia. The next phase aims to double the LNG liquefaction capacity of the Shell-led project in the early 2030s. Currently, Shell holds a 40% stake in LNG Canada and is expected to receive nearly 6 million tonnes per annum (mtpa) of additional LNG from the expansion.

Mitsubishi Corporation, which previously held a 15% stake in the Japanese firm's unit, will see its stake diluted with the entry of Blackstone and the Canadian institutional investors. The Japanese firm has stated that the transaction will not impact its LNG offtake volumes or customers and welcomes the Funds as a financial partner in the Holdco while maintaining its involvement in the natural gas and LNG value chain in Canada.

LNG Canada Phase 2 was among the first five major projects of national importance proposed by Canadian Prime Minister Mark Carney last year to diversify Canada's energy exports from the United States and elevate Canada's status as an energy superpower. The project in Kitimat is designed to supply cost-competitive gas to Asian markets, where demand for LNG is anticipated to surge significantly, as stated by Shell in late September.