Tokyo Gas Co. is set to acquire a stake in a Texas shale gas development from Chevron Corp., continuing the Japanese utility’s strategy of consolidating its North American energy assets in a deal worth tens of billions of yen.
The transaction, expected as early as April, represents Tokyo Gas’s latest move to enhance its U.S. natural gas trading capabilities. The company will extract gas from the development for market trading and supply to power plants and other customers.
This acquisition follows Tokyo Gas’s ¥400 billion ($2.66 billion) purchase of Texas-based Rockcliff Energy in late 2023. By obtaining assets near its existing operations, the company aims to reduce pipeline infrastructure costs while concentrating investments in the resource-rich Haynesville formation that stretches from Texas to Louisiana.
The strategic pivot comes amid Tokyo Gas’s portfolio realignment. In February, the utility reached an agreement to sell its Eagle Ford shale gas stake in southern Texas to Shizuoka Gas for approximately ¥20 billion ($130 million), amid scrutiny from activist shareholder Elliott Investment Management.
Tokyo Gas currently handles about 10 million tonnes of U.S. natural gas annually. The company’s shale operations generated average yearly operating profits of ¥13.5 billion ($90 million) from fiscal 2020 to 2024, with ambitious plans to increase this to nearly ¥70 billion ($466 million) in the 2025-2030 period. To achieve this growth, Tokyo Gas is committing almost ¥300 billion ($2 billion) in shale investments through fiscal 2028.
Last year, the Japanese utility also secured a 49% stake in the trading subsidiary of North American natural gas marketer ARM Energy Holdings, establishing its own channel for selling extracted gas.
