Tokyo Gas Natural Resources (TGNR) announced plans last December to buy Texas-based natural gas producer Rockcliff Energy from private equity firm Quantum Energy Partners for $2.7 billion as part of its efforts to expand its overseas business.
The deal is part of the Japanese company's efforts to expand its North American shale gas operations to meet the growing demand for natural gas as an energy-transition fuel. According to Industry Research Co., the global shale gas market size was valued at $ 46.4 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 7.71% to $72.5 billion by 2028.
Under the deal, TGNR will buy all shares in Rockcliff Energy from Quantum Energy Partners. With the acquisition, TGNR's natural gas production will quadruple to 1.3 billion cubic feet per day, making it one of the largest shale gas producers in Texas and Louisiana, according to Tokyo Gas.
"We expect our gas production will be more efficient after the acquisition as Rockcliff Energy's output area is located adjacent to TGNR's blocks," said Takashi Nakao, Tokyo Gas Senior General Manager of Global Business Development.
The production is also close to new liquefied natural gas (LNG) export terminals and other facilities expected to increase demand for natural gas in the future, Nakao added.
Asked if the supply will be exported to Japan as LNG, Nakao said the current plan is to sell all the gas in the U.S. domestic market, though he did not rule out possibly sending it as LNG to Japan in the future.
