A unit of Tokyo Gas Co Ltd is in preliminary talks to buy a U.S. natural gas producer from private equity firm Quantum Energy Partners
If the deal goes through, it would be the Japanese company’s latest gas security move.
Sources said a cash deal with Houston-based TG Natural Resources, 70% owned by the Japanese energy company, is expected to be announced this month. Castleton Commodities International (CCI) owns the rest of TG Natural Resources.
TG Natural Resources is arranging financing from several sources to support the deal, including banks and private lenders.
Quantum and CCI declined to comment.
Rockcliff produces more than 1 billion cubic feet of natural gas a day from the Haynesville Shale formation, which extends through Louisiana and East Texas.
The Rockcliff purchase will significantly expand TG Natural Resources’ operations: as of June 2022, the company was producing about 330 million cubic feet per day from the Haynesville formation.
In October, Tokyo Gas agreed to sell its stakes in a portfolio of four Australian liquefied natural gas (LNG) projects for $2.15 billion to a division of U.S. investment firm EIG.
Russia’s invasion of Ukraine has cut the flow of gas to Europe and caused European countries to import record amounts of LNG, limiting global supply and driving up prices.
Resource-poor Japan is working to diversify Russia’s Sakhalin project, which accounts for 9 percent of Japan’s 74.3 million tons per year of LNG imports.