Brookfield Asset Management Inc. and its affiliated infrastructure group are acquiring a more than 40% stake in Cheniere Energy Partners LP from Blackstone Group Inc’s equity business, Bloomberg reported, citing people familiar with the matter. The report said both firms were negotiating the terms of the transaction that value the deal at $7 billion.
In 2012, Blackstone Energy Partners invested $1.5 billion in Cheniere Energy Partners to develop the $25-billion LNG terminal in Sabine Pass, Louisiana. Blackstone is expected to raise about $5 billion from the sale. Meanwhile, Blackstone’s public shareholders are estimated to receive distributable earnings per share of $0.16, which includes $0.13 per share when the transaction is expected to close in this quarter.
Brookfield is betting that the LNG industry would continue to thrive despite the short-term challenge stemming from the coronavirus pandemic. Cheniere generated $4.3 billion/year from Sabine Pass and other LNG terminals thanks to fixed-fee contract structure which shields it from collapsing prices. Sabine Pass is expected to earn about $3.3 billion/year in fixed fees when its sixth liquefaction train enters service in less than three years.
