Key Takeaways
- • Blackstone and four Canadian institutional investors signed a $3.1-billion US deal to acquire a non-controlling 49.9 per cent interest in the Mitsubishi Corp. subsidiary that holds a 15 per cent stake in LNG Canada, the country's first liquefied natural gas export facility.
- • The investor group comprises the Canada Pension Plan Investment Board, the Ontario Municipal Employees Retirement System, the Investment Management Corp. of Ontario and the Public Sector Pension Investment Board, alongside Blackstone.
- • Blackstone describes LNG Canada as "one of Canada's most significant energy projects," while CPP Investments calls it a high-quality, globally strategic asset with strong long-term fundamentals.
- • Environmental groups including Stand.earth and Shift Action for Pension Wealth and Planet Health criticized the pension funds' participation, arguing the capital should go to clean energy.
- • LNG Canada's Phase 2 expansion, announced in September, would double the facility's capacity to 28 million tonnes a year.
Summary
U.S. asset manager Blackstone and four Canadian institutional investors have signed a $3.1-billion US deal to acquire a non-controlling stake in a Mitsubishi Corp. subsidiary that holds an interest in LNG Canada, the country's first liquefied natural gas export facility, according to The Canadian Press and CBC. Blackstone and the investors together are acquiring a 49.9 per cent interest in the Mitsubishi unit. The investor group includes the Canada Pension Plan Investment Board, the Ontario Municipal Employees Retirement System, the Investment Management Corp. of Ontario and the Public Sector Pension Investment Board.
Geoff Souter, managing director at CPP Investments, said in a news release on Monday that LNG Canada is "a high-quality, globally strategic asset with strong long-term fundamentals and attractive return potential for the CPP fund." Rick Campbell, senior managing director at Blackstone Credit & Insurance, called the project "one of Canada's most significant energy projects" that will "help meet rising energy demands across global markets." New York-based Blackstone manages $140 billion US through its infrastructure and asset-based credit platform.
LNG Canada is a joint venture between Shell, PetroChina, Malaysia's Petronas, Japan's Mitsubishi Corp. and South Korea's KOGAS. Mitsubishi holds a 15 per cent interest through its subsidiary and will retain its full share of the plant's LNG supply. In September, LNG Canada announced it will proceed with the Phase 2 expansion at its Kitimat, B.C. terminal, which will double capacity to 28 million tonnes a year. The project has been referred to the federal major projects office.
Environmental groups criticized the investment. Richard Brooks, climate finance director at Stand.earth, said Canadians should be "extremely alarmed" and argued that LNG is not risk-free, particularly over the long term. Adam Scott, director of Shift Action for Pension Wealth and Planet Health, said the pension funds have broken trust with their members. Brooks noted that energy prices have risen sharply in Europe and Asia since the U.S. and Israel launched their war on Iran in February, disrupting Persian Gulf supplies.
Separately, Blackstone has provided $150 million in financial backing to Ksi Lisims LNG, another West Coast natural gas export project near the Alaska border, through its affiliate Blackstone Energy Transition Partners.
Geoff Souter, managing director at CPP Investments, said in a news release on Monday that LNG Canada is "a high-quality, globally strategic asset with strong long-term fundamentals and attractive return potential for the CPP fund." Rick Campbell, senior managing director at Blackstone Credit & Insurance, called the project "one of Canada's most significant energy projects" that will "help meet rising energy demands across global markets." New York-based Blackstone manages $140 billion US through its infrastructure and asset-based credit platform.
LNG Canada is a joint venture between Shell, PetroChina, Malaysia's Petronas, Japan's Mitsubishi Corp. and South Korea's KOGAS. Mitsubishi holds a 15 per cent interest through its subsidiary and will retain its full share of the plant's LNG supply. In September, LNG Canada announced it will proceed with the Phase 2 expansion at its Kitimat, B.C. terminal, which will double capacity to 28 million tonnes a year. The project has been referred to the federal major projects office.
Environmental groups criticized the investment. Richard Brooks, climate finance director at Stand.earth, said Canadians should be "extremely alarmed" and argued that LNG is not risk-free, particularly over the long term. Adam Scott, director of Shift Action for Pension Wealth and Planet Health, said the pension funds have broken trust with their members. Brooks noted that energy prices have risen sharply in Europe and Asia since the U.S. and Israel launched their war on Iran in February, disrupting Persian Gulf supplies.
Separately, Blackstone has provided $150 million in financial backing to Ksi Lisims LNG, another West Coast natural gas export project near the Alaska border, through its affiliate Blackstone Energy Transition Partners.
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