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Tokyo Gas spends $657m in U.S. shale, solar assets

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Tokyo Gas Co Ltd plans a $ 657 million sale takeover of U.S. shale gas operator, Castleton Resources, and to buy a U.S. solar power development project in a bid to expand its overseas operations.

The move echoes a long-term strategy mapped out by Japan’s biggest city gas supplier last year, which includes stepping up overseas expansion and boosting stakes in renewable energy and liquefied natural gas (LNG) development operations.

The Japanese company will invest about 20 billion yen to raise its stake in Castleton to 70% from 46% through buying new shares to be issued by the U.S. operator to finance the planned acquisition of additional gas assets in Louisiana, Koji Yoshizaki, senior general manager of Tokyo Gas, said.

“As U.S. shale gas prices have fallen sharply, we think it is a good time to buy stake in gas assets at a relatively cheap price,” Yoshizaki told a news conference.

The deal, which marks Tokyo Gas’ first purchase of a U.S. shale gas operator, will be completed on Aug. 14.

The procurement of the additional gas assets will boost Castleton’s output to 473 million cubic feet a day from 296 million cubic feet now.

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