Tokyo Gas Co Ltd, Japan's largest city gas supplier, announced on Friday it has entered into a definitive agreement with Shizuoka Gas Co., Ltd. to sell its 25% stake in the Eagle Ford shale gas project in southern Texas for $130 million.

Tokyo Gas initially acquired its interest in the Eagle Ford project in 2016, marking its second venture into U.S. shale gas development. For the past eight years, the project has contributed to the growth of the company’s international operations. However, as part of its "Compass2030" group management vision, which emphasizes the "transformation of the LNG value chain," Tokyo Gas has decided to streamline its U.S. holdings. The sale allows the company to concentrate on its TG Natural Resources unit, which possesses significant assets in East Texas and North Louisiana, including those acquired through the recent acquisition of Rockcliff Energy.

For Shizuoka Gas, this acquisition marks a significant milestone. It represents the company's first foray into the U.S.-based business sector and its initial entry into the upstream natural gas segment. Shizuoka Gas projects the volume of shale gas production attributable to its stake in the project to be equivalent to 400,000 metric tons of liquefied natural gas (LNG) annually. The gas produced from the project, operated by Lewis Energy Group, will be sold within the United States.

Shizuoka Gas views this acquisition as a stepping stone for further expansion in the U.S. market. The company has ambitious goals to increase its overseas business, aiming to generate 14% of its recurring profit from international operations by 2030. This strategic investment in the Eagle Ford project demonstrates Shizuoka Gas’s commitment to diversifying its portfolio and securing access to reliable energy sources.

Shizuoka Gas is a major Japanese gas utility primarily serving the Shizuoka Prefecture. Established in 1910, it provides city gas and liquefied petroleum gas (LPG) to residential and industrial customers.

Tokyo Gas, founded in 1885, is Japan's largest natural gas utility, supplying gas and power to over 12 million customers in the Greater Tokyo Area.  

A key player in the energy sector, Tokyo Gas is involved in various aspects of the energy value chain, from upstream resource development and procurement to gas transportation and sales. The company is actively diversifying its portfolio, with investments in renewable energy and overseas projects, including shale gas development in the United States.  

Tokyo Gas is committed to ensuring a stable energy supply while also pursuing initiatives to reduce environmental impact and contribute to a sustainable society.