A unit of Tokyo Gas Co. is in advanced talks to buy U.S. natural gas producer Rockcliff Energy for about $4.6 billion, according to people familiar with the matter.
Rockcliff is owned by private equity firm Quantum Energy Partners.
A deal is considered important for the import-dependent Asian nation after supply markets for the commodity were roiled by Russia’s invasion of Ukraine.
The all-cash deal involves Houston-based TG Natural Resources, which is 70% owned by the Japanese energy firm.
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Castleton Commodities International (CCI) owns the rest of TG Natural Resources.
A deal could be announced this month, however no deal was guaranteed and talks could end without an agreement, according to the report.
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Quantum and CCI declined to comment. Rockcliff and TG Natural Resources did not immediately respond to requests for comment. Tokyo Gas was not immediately available to comment.
Rockcliff produces more than 1 billion cubic feet per day of natural gas from the Haynesville shale formation, which stretches across Louisiana and East Texas.
Quantum originally backed the Rockcliff management team with a $350 million investment in 2015.
Russia’s invasion of Ukraine has cut gas supply flows to Europe and led European nations to import record amounts of LNG cargoes, straining global supplies and elevating prices.
Resource-poor Japan has been working to diversify from Russia’s Sakhalin project, which accounts for 9% of Japan’s total LNG imports of 74.3 million tonnes per year.
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In 2021, Japan imported 7.1 million tonnes of LNG from the United States, accounting for 9.5% of its total imports.
Reuters contributed to this report.