Tokyo Gas plans to allocate more than half of its overseas investments over the next three years to the US to drive growth. CEO Shinichi Sasayama highlighted North America as the top priority, citing rising demand from data centers and semiconductor plants.
Tokyo Gas, Japan's largest city gas provider, has outlined a plan to invest up to 1.3 trillion yen through March 2029, with 350 billion yen earmarked for overseas projects. CEO Shinichi Sasayama stated that more than half of these overseas investments will target the US to enhance growth.
"North America is our top priority in our overseas strategy," Sasayama told Reuters, pointing to surging US domestic gas demand fueled by power needs for data centers and semiconductor plants, as well as expanding LNG exports. The company has focused upstream investments on East Texas shale in recent years to improve cost competitiveness. Moving forward, it aims to develop these assets to increase profitability.
Key past actions include acquiring Rockcliff Energy in Texas and Louisiana in late 2023, and purchasing a 70% stake in east Texas gas assets from Chevron in April this year. Tokyo Gas is also open to further investments in liquefaction plants or gas purchase agreements, depending on conditions.
As Japan's second-largest LNG buyer, the utility holds a long-term contract for 1.1 million metric tons annually from Russia's Sakhalin-2 project. A US sanctions exemption expires on December 19, but Tokyo Gas has requested an extension. "I don’t think the likelihood of it really ending there (on 19th) is particularly high at this point," Sasayama said, noting the risk of immediate supply disruption is "quite low."
He added: "I do feel that the tone of criticism (from Western allies) has grown harsher, but since this is a project contributing to stable supply, including for Japan, we will proceed in consultation with the government."
In the fiscal year ended March 31, 2025, Tokyo Gas procured 11.56 million tons of LNG, with nearly half from Australia. Its sourcing from Australian projects is diversified beyond the east coast, mitigating potential risks from an upcoming gas market review.
