Page 16 - NorthAmOil Week 34

NorthAmOil INVESTMENT NorthAmOil

The partnership was
created by Cheniere
to develop the $25bn
Sabine Pass LNG export
terminal in Louisiana.

Blackstone agrees to offload Cheniere stake

US BLACKSTONE Group’s private equity business Brookfield’s investment comes after the asset
has agreed to sell its stake of over 40% in LNG manager also purchased a 25% equity interest in
producer Cheniere Energy’s limited partner- Dominion Energy’s Cove Point LNG terminal in
ship, Cheniere Energy Partners, to Brookfield Maryland for about $2.1bn in late 2019. When
Infrastructure and its own affiliated company. that acquisition was announced, Dominion said
An August 24 filing did not disclose the value it was part of its plan to establish a new operat-
of the deal. However, Bloomberg cited sources ing structure. However, it subsequently became
familiar with the matter as saying the transac- clear that the power and energy company was
tion included a $34.25 per unit sale price, which increasingly pivoting away from natural gas and
would value the deal at $7bn. Blackstone will more towards renewables. Dominion unveiled a
gain $5bn from the sale, Bloomberg reported. target of net zero emissions by 2050 earlier this
Blackstone’s public shareholders are expected year, and then in July announced it was selling its
to see distributable earnings of $0.16 per share, gas transmission and storage assets to Berkshire
including $0.13 per share upon the deal’s closing, Hathaway Energy for $4bn. The transaction,
according to Bloomberg’s sources. The transac- which is anticipated to close in the fourth quar- Brookfield’s
tion is anticipated to close later in the third quar- ter of 2020, includes Berkshire Hathaway taking
ter of this year. over a 25% stake and operatorship at Cove Point investment comes
Cheniere owns the majority 48.6% stake in LNG.
Cheniere Energy Partners, and aside from Black- In contrast with Dominion, though, LNG after the asset
stone CQP Holdco’s interest, the public holds is Cheniere’s core business. The company also
the remainder. The partnership was created by operates the Corpus Christi LNG export termi- manager also
Cheniere to develop the $25bn Sabine Pass LNG nal in Texas, in which Cheniere Energy Partners purchased a 25%
export terminal in Louisiana. The facility has does not participate.
been operational since 2016 and is the largest Over 1,025 cargoes have been shipped from equity interest
LNG export terminal in the US, with a capacity the Sabine Pass facility to date, according to
of around 25mn tonnes per year and a sixth 5mn Cheniere’s website. More than 85% of the pro- in Dominion
tpy train currently under construction. duction volume at the terminal is contracted and
Blackstone Energy Partners made a $1.5bn is expected to earn about $3.3bn per year in fixed Energy’s Cove
investment in Cheniere Energy Partners in fees by the time the sixth train starts up in 2022. Point LNG
2012. Brookfield, for its part, reported an ini- Like other LNG exporters – especially in the
tial investment in 2016 and as of June 2020 it US – Cheniere was affected by the downturn in terminal.
had accumulated a 0.34% stake in the partner- LNG demand thanks to coronavirus (COVID-
ship. Bloomberg noted that it first reported 19) earlier this year, and saw a number of its
discussions about the possibility of Brookfield’s contracted cargoes scheduled for loading
infrastructure group acquiring a minority over the summer being cancelled. However,
position in Cheniere Energy Partners earlier demand is now recovering, and cargo cancel-
this month. lations have slowed.™

P16 www. NEWSBASE .com Week 34 27•August•2020