Trending

Eagle Ford Shale Stake Bought by Tokyo Gas

Fracking77808.adapt.768.1

On Tuesday, Tokyo Gas Co reported the purchase of 25 percent stake in an Eagle Ford shale gas formation. It could be among the first shale investments in the United States by a Japanese company since the drop in energy prices.

The largest city gas supplier in Japan said it bought the stake through VirTex Producing Co. The firm did not break down the value of the stake, but it said it predicts spending up to $76.64 million (8 billion yen) for the stake and investments in drilling.

On Tuesday, the Nikkei newspaper announced that the company was preparing to purchase a 25 percent interest in the Eagle Ford for over 5 billion yen.

The project is already under commercial production. It is projected to supply 200,000 tons of liquefied natural gas output for the next 20 years, according to Tokyo Gas.

In 2013, Tokyo Gas purchased a stake in shale gas from Quicksilver Resources through Texas’ Barnett Basin. The gas output totaled 0.35 million to 0.5 tons per year of LNG output for $485 million. However, due to plummeting energy prices, the firm has publicized impairment losses twice for the project.

Hisashi Nakamura, the firm’s senior general manager of its global business department, told Reuters that the company hopes to buy up more U.S. stakes in the future.

Nakamura said would they look for more deals, “but only the cost-competitive projects that are profitable even at low prices would survive, so they are not found everywhere.”

Article written by HEI contributor Briana Steptoe.

Subscribe to our free eNewsletter

Be the first to comment on "Eagle Ford Shale Stake Bought by Tokyo Gas"

Leave a comment

Your email address will not be published.


*