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Tokyo Gas Subsidiary Negotiates $4.6 Billion Acquisition of US Natural Gas Producer

A unit of Tokyo Gas, TG Natural Resources, is reportedly in advanced talks to purchase US natural gas producer Rockcliff Energy from Quantum Energy Partners for around $4.6 billion, including debt.

Gas Pipeline
Gas Pipeline

The deal, expected to be announced this month, is financed by various sources, including banks and private credit providers. If completed, the acquisition would significantly increase TG Natural Resources' operations. The company currently produces around 330 net million cubic feet per day from the Haynesville shale formation in Louisiana and East Texas. Rockcliff, on the other hand, produces over 1 billion cubic feet per day from the same formation.

Japan's Diversification of Natural Gas Supplies

The potential acquisition comes as Japan, heavily dependent on imports for its natural gas supply, seeks to secure resources from friendly jurisdictions following Russia's invasion of Ukraine, which disrupted supply markets and caused prices to rise.

Japan, which has limited domestic resources, has also been working to diversify its supply sources, specifically away from Russia's Sakhalin project, which accounts for 9% of Japan's total annual LNG imports of 74.3 million tonnes. In 2021, Japan imported 7.1 million tonnes of LNG from the US, accounting for 9.5% of total imports. To this end, Japanese companies recently signed several deals to receive LNG supplies, including a preliminary agreement with Oman LNG and a 20-year deal with Venture Global.