Blackstone, Canadian pension funds invest $3.1 billion in LNG Canada stake

TORONTO · U.S. asset manager Blackstone and four major Canadian pension funds have signed a US$3.1-billion deal to acquire a non-controlling stake in the Mitsubishi Corp. subsidiary that holds an interest in LNG Canada. 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. They are together acquiring a 49.9 percent interest in the Mitsubishi unit, which holds a 15 percent stake in the LNG Canada export terminal in Kitimat, B.C. The total investment includes US$1.6 billion for the equity stake and a further US$1.5 billion commitment to help fund the project's expansion plans. "LNG Canada is a high-quality, globally strategic asset with strong long-term fundamentals and attractive return potential for the CPP fund," said Geoff Souter, managing director at CPP Investments. 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." The deal marks the first investment by Canadian pension funds in the country's first liquefied natural gas export facility, which opened in June 2025.

Mitsubishi will retain its full share of the plant's LNG supply and remain the controlling partner of the subsidiary. Under the agreement, Mitsubishi will continue to offtake 2.1 million tonnes of liquefied natural gas annually from LNG Canada. The transaction provides Mitsubishi with capital while allowing it to maintain its strategic interest in the project. Shell, the largest shareholder in LNG Canada with a 40 percent stake, is no longer pursuing a similar transaction to reduce its stake, at least in the near term, according to three sources with knowledge of the process. The investment comes as LNG Canada moves forward with a Phase 2 expansion project that would double the terminal's capacity to 28 million tonnes a year. The expansion was one of the first five projects referred to Canada's Major Projects Office as a national priority. Institutional investors have shown interest in LNG Canada because it is a large asset that can ship low-cost gas to Asia, where demand is increasing, and is capable of producing stable, long-term cash flows.

Climate advocacy groups criticized the pension funds' decision to invest. "Canadians should be 'extremely alarmed' to see pension funds investing in LNG on behalf of millions of workers and retirees," said Richard Brooks, climate finance director at Stand.earth. He argued that every dollar 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. "We're now using our taxes and our retirement savings against us to harm our climate," Scott said. The deal is an example of a "capital solutions" transaction, using a mix of equity and debt to provide corporations a way to unlock cash from assets. Blackstone has led similarly structured investments in Canada, including deals involving Rogers Communications' wireless infrastructure and the Aeroplan loyalty program. "This announcement builds on our deep conviction in Canada, our partnership with the country's leading institutional investors and our ability to provide large corporates with flexible solutions to unlock value from their most critical assets," said Zachary Rubenstein, managing director for Blackstone Credit & Insurance.

With files from The Canadian Press, BNN Bloomberg and The Globe and Mail