Singapore’s Temasek exits Cheniere Energy

Between May 2012, when Temasek and RRJ Capital announced they would jointly invest $468 million for a 19% stake in Cheniere, and the end of the June, the company's stock gained nearly 70%. It remains up 48.3% year-to-date, despite a blip in response to Temasek's partial exit.

Temasek bought 15.5 million shares in Cheniere during the second quarter of 2012 for $228 million, and then increased its position to 18.3 million shares in the following three-month period.

Cheniere put the proceeds towards the purchase of $500 million of a $2 billion equity securities issue by Cheniere Energy Partners (CEP), a master limited partnership. The partnership controls the Sabine Pass LNG project in Louisiana, America's first LNG export plant, and it required capital to support its development.

The Blackstone Group invested $1.5 billion in the limited partnership in May 2012 and then reportedly led a round of funding that saw China Investment Corporation (CIC) and GIC Private each put about $500 million.

In February, RRJ Capital and GSO Capital, Blackstone's credit arm, bought the bulk of $372 million in shares issued by CEP.

A CEP presentation released in March stated that that RRJ and Temasek owned approximately 13% of Cheniere. According to a Cheniere presentation dated June, the company owns 58% of CEP while Blackstone holds a 29% interest. It is possible that the CIC and GIC commitments were structured as co-investments overseen by Blackstone.

The Sabine Pass project already has LNG sale and purchase agreements lined up with a string of oil and gas majors that will kick in once production starts, currently scheduled for late 2015. Cheniere expects global LNG imports to rise from 303 million tons per annum in 2015 to 511 million tons by 2030. Asia will account for 60% of this demand.

Temasek is becoming a prolific investor in energy assets, targeting resources that are seen as strategically aligned with Asia's energy needs. While financial services account for nearly one third of the Singapore sovereign fund's assets, natural resources accounted for S$4 billion ($3.1 billion) out of the fund's total S$7 billion in net investments for the year ended March 2013.

Temasek is also a frequent co-investor with RRJ - it is said to be one of the PE firm's most significant LPs - and together they have made commitments to Chinese gas transmission company Kunlun Energy as well as to Cheniere.

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• Topics
• Exits
• Industrials
• Southeast Asia
• North America
• Temasek Holdings
• Exit
• energy
• Commodities
• USA
• Singapore