A unit of Japan’s city gas supplier and LNG importer, Tokyo Gas, has agreed to buy Texas-based natural gas producer Rockcliff Energy from private equity firm Quantum Energy Partners for $2.7 billion.
Tokyo Gas America decided to acquire all shares of Rockcliff Energy II through its ownership interest in TG Natural Resources (TGNR), according to a statement by Tokyo Gas.
TGNR is a unit of Tokyo Gas America in which the firm has a 79 percent stake while a unit of Castleton Commodities International holds the rest.
Tokyo Gas has been expanding its upstream business in the US through TGNR, which became
its subsidiary in 2020.
Rockcliff’s main business is upstream development in Texas and Louisiana targeting Haynesville shale and Cotton Valley formations.
US LNG export
Tokyo Gas said it is expanding its shale gas business as demand for gas is expected to increase in the US due to the construction of new LNG export terminals.
Also, TGNR has been seeking to acquire “superior” assets around its existing assets in Texas and Louisiana.
“With this acquisition, the outcome from TGNR will become the base of overseas earnings,” Tokyo Gas said.
As a result of this acquisition, the production volume of gas and natural gas liquids held by TGNR
will increase by about 4 times from some 330 million cubic feet per day (9.3 million m3/day, gas equivalent) to 1,300 million cubic feet per day (37 million m3/day, gas equivalent), it said.
In the US, Tokyo Gas is working with its partners Osaka Gas, Toho Gas, Mitsubishi, and also Sempra Infrastructure to produce e-methane in Texas or Louisiana, liquefy it at Sempra’s Cameron LNG facility, and transport it to Japan.
E-methane is a synthetic gas produced from renewable hydrogen and carbon dioxide and can be transported via the existing gas infrastructure, including the LNG supply chain.