Tokyo Gas Sells U.S. Shale Gas Stake to Shizuoka Gas for $130 Million

Tokyo Gas, Japan's largest city gas supplier, has announced its decision to sell a 25% stake in an Eagle Ford shale gas project in south Texas to Shizuoka Gas for $130 million. This strategic move is part of Tokyo Gas' ongoing portfolio review aimed at improving efficiency and focusing on core assets. The deal, expected to close in the first half of 2025, will leave Tokyo Gas with a 75% stake in the project, allowing it to maintain a significant presence in the U.S. natural gas market.



The Eagle Ford shale gas project, operated by Lewis Energy Group, is projected to produce 400,000 metric tons per year of liquefied natural gas (LNG) equivalent, which will be sold in the United States. The acquisition by Shizuoka Gas marks its first foray into the upstream natural gas sector and entry into the U.S. market. This deal is part of Shizuoka Gas' broader strategy to expand its overseas business and generate 14% of its recurring profit from international operations by 2030.

The sale of the stake in the Eagle Ford shale gas project is expected to have a significant impact on the U.S. natural gas market, particularly in the Eagle Ford shale region. The increased investment and production in the region could lead to a higher supply of natural gas, potentially influencing future pricing dynamics. Additionally, the deal strengthens the U.S.-Japan energy alliance, as Japan seeks to secure stable, long-term supplies of natural gas to meet its energy demands.

In conclusion, Tokyo Gas' sale of a 25% stake in the Eagle Ford shale gas project to Shizuoka Gas is a strategic move that aligns with both companies' long-term goals. For Tokyo Gas, the deal allows it to focus on its core assets and maintain a significant presence in the U.S. natural gas market. For Shizuoka Gas, the acquisition is a crucial step in its expansion into the U.S. market and its broader strategy to generate a significant portion of its recurring profit from international operations by 2030. The deal is expected to have a notable impact on the U.S. natural gas market and pricing dynamics, as well as strengthen the U.S.-Japan energy alliance.