Cheniere Lands $2 Billion Investment from Blackstone (CQP, BX, LNG)

Cheniere Energy Partners L.P. (AMEX: CQP) has announced an agreement with affiliates of Blackstone Group LP (NYSE: BX) under which Cheniere will receive $2 billion in financing for the first two of a planned four natural gas liquefaction trains at its Sabine Pass terminal. Blackstone will purchase approximately 111 million senior subordinated paid-in-kind (PIK) units for $18/unit:

The CQP PIK Units would have a quarterly PIK rate of 4.2% and convert into CQP common units after two liquefaction trains begin commercial operation, which we expect to occur in 2016.

In addition to the liquefaction facilities, Cheniere plans to use part of the proceeds to acquire a pipeline from Cheniere Energy Inc. (AMEX: LNG). The company expects to complete additional debt financing in the first quarter to pay the $4-$5 billion construction costs for the first two liquefaction trains.

Blackstone has also obtained four seats on Cheniere’s board, with four seats remaining for Cheniere and three for independent directors.

Shares in Cheniere Partners are up 4.7% at $21.88 this morning and shares in Cheniere Energy are up more than 13% at $15.92, after posting a new 52-week high of $16.25 earlier this morning.