Japan’s power generation major JERA will pay $1.5 billion for natural gas assets in the Haynesville basin, the company said today, in line with plans to boost its exposure to U.S. gas.
The Japanese company will buy the assets from Williams and GEP Haynesville II, JERA said in a press release, adding that the assets currently produce some 500 million cu ft of natural gas daily and feature 200 undeveloped locations. The deal includes a provision to boost output from the assets to 1 billion cu ft daily, JERA also said.
A month ago, Reuters reported, citing unnamed sources, that the Japanese utility was negotiating a shale gas asset acquisition that could fetch $1.7 billion. In separate negotiations, JERA could invest substantial amounts in the Alaska LNG project as part of the trade deal between the United States and Japan that saw the latter pledge to buy $7 billion worth of U.S. energy commodities to reduce its trade surplus.
Japanese companies have been considering investments in the $44-billion Alaska LNG project, but so far they have appeared to be concerned that the costs may be too high, considering the cold weather in Alaska and the scale of the pipelines needed to bring the project on stream.
The Alaska LNG project will have a capacity of 20 million tons of liquefied natural gas annually, to be transported via an 800-mile pipeline to the Gulf of Alaska, from where it will be shipped around the world. The project also involves local supply of natural gas for the state of Alaska.
“The U.S. energy sector is leading the way in the global LNG market and JERA’s investments have lined up accordingly,” John O’Brien, JERA Americas’ chief executive officer, said. “The upstream Haynesville Acquisition is a strategic addition to our asset portfolio, enabling us to advance our unique supply chain expertise while deepening our commitment to America’s energy future.”
By Irina Slav for Oilprice.com
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