Tokyo Gas purchases Chevron's Texas gas assets for $525 million

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TOKYO (AP) — TG Natural Resources, owned by Tokyo Gas Co. and Castleton Commodities International, is acquiring a 70% stake in the East Texas gas assets of Chevron U.S.A. Inc., a subsidiary of Chevron Corp., for $525 million.

The move, announced Tuesday, marks Tokyo Gas’ expansion of its U.S. business at a time when President Donald Trump is seeking to boost U.S. gas exports.

Tokyo Gas denies the move is in response to Trump’s policies — the investment was being studied long before he came to office — but an investment of this scale in the U.S. is expected to be seen favorably by the Trump administration.

TGNR is a major gas producer in East Texas, jointly owned by TG East Texas Resources LLC, a wholly owned subsidiary of Tokyo Gas America, and CCI U.S. Asset Holdings.

Of the purchase amount, $75 million will be paid in cash and $450 million used as capital to fund the Haynesville development in Texas.

The shale gas produced on the site is for the U.S. market for now, but exporting it in the form of liquefied natural gas to Japan is an option for the future, according to Tokyo Gas.

Tokyo Gas is Japan’s largest provider of city-area gas, primarily serving the Tokyo area. Besides Texas, it also has operations in the U.S. in the Louisiana area.

“We are excited to partner with a world-class company like Chevron on this transaction. There is considerable operational overlap between the Chevron acreage and the legacy TGNR acreage, which will allow TGNR to realize synergies of over $170 million during the development of the asset,” TGNR Chief Executive Craig Jarchow said in a statement.

Resource-poor Japan imports almost all its energy, and its main sources for gas are now Australia and the U.S.