Mitsubishi to Acquire Haynesville Shale Assets for $5.2B

Mitsubishi Corp announced Friday a deal to acquire producing shale gas positions in Louisiana and Texas from operators related to Aethon Energy Management LLC for $5.2 billion.

“This transaction marks MC’s entry into the U.S. shale gas business across the value chain, from upstream ownership through domestic sales and export of produced gas”, the diversified Japanese group said in an online statement.

Mitsubishi signed an agreement to buy all equity stakes in Aethon III LLC, Aethon United LP and related entities (collectively Aethon) with existing shareholders including Aethon Energy Management, Ontario Teachers’ Pension Plan and RedBird Capital Partners, the statement said. Mitsubishi said it would purchase a total of nearly 1.7 million units.

The parties expect to consummate the transaction in the second quarter.

“Building on MC’s established North American energy platform – which includes upstream shale gas development with Ovintiv in British Columbia, midstream marketing and logistics through CIMA Energy in Houston, LNG exports via LNG Canada and Cameron LNG, and power generation through Diamond Generating Corp – this acquisition further strengthens MC’s integrated energy and power business”, the statement said.

Mitsubishi said it plans to expand its U.S. presence into data center development, chemicals production and related businesses.

“Aethon’s shale gas assets are primarily located in the Haynesville Shale formation, spanning Texas and Louisiana, and currently produce approximately 2.1 Bcfd [billion cubic feet a day] of natural gas (equivalent to about 15 million tons per year of LNG)”, the company noted.

“Haynesville is a major supply source of natural gas for the growing southern U.S. market and offers favorable access to multiple LNG export terminals, including Cameron LNG, where MC holds liquefaction capacity rights under a tolling agreement.

“Aethon’s natural gas is currently sold in the U.S. southern market, and part of this volume is being considered for export as LNG to Asia, including Japan, as well as to Europe”.

Earlier on Thursday Aethon Energy Management and Mitsubishi announced a separate agreement that establishes a framework for future collaboration “across energy transition and next-generation infrastructure projects”.

“The Global Strategic Alliance is intended to provide a platform for the parties to explore and evaluate potential projects in areas including liquefied natural gas, carbon capture, utilization and storage, geothermal energy, low-carbon natural gas solutions, and data center and digital-infrastructure development, as well as other mutually agreed initiatives aligned with long-term energy security and decarbonization objectives”, said a joint statement.

“The alliance reflects a shared strategic vision to combine Aethon’s operational, subsurface and infrastructure expertise with Mitsubishi’s global reach, capital relationships and advanced technology capabilities.

“Any specific projects or transactions arising from the alliance will be subject to further discussion, mutual agreement and the execution of definitive documentation.

“As part of the alliance framework, Mitsubishi intends to leverage its global relationships with capital providers to assist Aethon in evaluating potential financing solutions for qualifying projects, including engagement with Japanese and international financial institutions and export credit agencies, where appropriate”.

To contact the author, email jov.onsat@rigzone.com

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.