Tokyo Gas Expands U.S. Footprint with $525 Million Chevron Deal

Tokyo Gas Co. Ltd., Japan’s largest city gas provider, has made a significant move to bolster its energy security by acquiring a 70% stake in Chevron’s East Texas gas assets for $525 million. This strategic acquisition, announced on April 1, 2025, underscores Tokyo Gas’s commitment to diversifying its energy sources and securing long-term natural gas supplies for Japan, a country heavily reliant on fossil fuel imports.

The deal, which includes $75 million in cash and $450 million as capital to fund the Haynesville development, positions Tokyo Gas to benefit from the growing export capacity of U.S. natural gas. The Haynesville shale, renowned for its rich natural gas reserves, extends across Texas and Louisiana and is a prolific gas-producing area. Chevron’s portfolio in this region covers approximately 72,000 acres of predominantly undeveloped land, offering considerable potential for future gas production.



For Tokyo Gas, this acquisition is a strategic investment aimed at diversifying its energy supply sources and reducing its reliance on imports from geopolitically sensitive regions. Japan, which accounts for about 40% of its electricity generation from natural gas, has been under constant pressure to diversify its energy sources and minimize its dependence on any single region, such as the Middle East or Russia. The acquisition of Chevron’s Texas gas assets represents a strategic move by Tokyo Gas to ensure a more secure supply of natural gas for Japan’s future energy needs.

The deal also aligns with Tokyo Gas’s broader strategy of securing stable, long-term gas supplies and diversifying its energy sources. By purchasing gas assets in Texas, Tokyo Gas is positioning itself to benefit from the growing export capacity of U.S. natural gas. The US has emerged as a major player in the global gas market, particularly through the export of LNG. Securing these assets allows Tokyo Gas to gain direct access to US gas production, ensuring a stable supply chain and reducing its exposure to market volatility.

In terms of economic and operational synergies, the acquisition is expected to yield significant benefits. TG Natural Resources LLC (TGNR), co-owned by Tokyo Gas and Castleton Commodities International, will add over 250 gross locations to its existing Haynesville inventory, extending its inventory life beyond 20 years at the current development pace. This extended inventory life will provide Tokyo Gas with a stable and long-term supply of natural gas, reducing its reliance on spot LNG purchases, which are often subject to price volatility.

The acquisition also aligns with Tokyo Gas's broader strategy of securing stable, long-term gas supplies and diversifying its energy sources. By purchasing gas assets in Texas, Tokyo Gas is positioning itself to benefit from the growing export capacity of US natural gas. The US has emerged as a major player in the global gas market, particularly through the export of LNG. Securing these assets allows Tokyo Gas to gain direct access to US gas production, ensuring a stable supply chain and reducing its exposure to market volatility.

For Chevron, the sale of its Texas gas assets is part of a broader strategic shift aimed at rebalancing its portfolio. In recent years, Chevron has faced growing pressure from investors to improve returns, and this has led the company to focus on more profitable ventures, including oil production and renewable energy investments. The US gas market, while abundant in resources, has been plagued by pricing pressures and a supply glut, reducing the profitability of gas production in certain regions.

Chevron’s decision to sell its Texas assets aligns with its strategy to streamline operations and divest from assets that no longer fit its long-term goals. This move allows Chevron to reallocate capital to higher-return projects, both in the traditional oil and gas sectors and in new energy ventures. The sale to Tokyo Gas not only provides Chevron with a significant cash infusion but also strengthens its ties with international buyers, particularly in Asia, where energy demand remains robust.

The acquisition of Chevron’s Texas gas assets by Tokyo Gas is a strategic move that aligns with Japan’s broader energy security strategy. By securing a stable and long-term supply of natural gas, Tokyo Gas can ensure a more stable and predictable revenue stream, which will positively impact its long-term profitability. The deal also strengthens Tokyo Gas's position as a leading player in the global natural gas market, enhancing Japan’s energy security by ensuring a more stable and diversified LNG supply. As global demand for cleaner energy continues to rise, Tokyo Gas’s investment in U.S. shale gas is seen as a strategic step in supporting the country’s transition toward more sustainable energy sources while maintaining economic stability.