Tokyo Gas buys stake in Castleton's Texas Unit
Japan's biggest city gas supplier Tokyo Gas (TOG.BE) Co said on Monday it has acquired a 30 percent stake in a subsidiary of Castleton Commodities International LLC, its first equity investment in a U.S. upstream company.
Tokyo Gas did not reveal the price for the stake in Castleton Resources LLC, which owns and operates over 160,000 net acres of leasehold in East Texas with access to the Cotton Valley and Haynesville Shale and has a net production of about 238 million cubic feet equivalent per day, equal to 1.65 million tonnes per annum of liquefied natural gas (LNGLF) (LNG).
Castleton Commodities paid more than $1 billion to buy those assets from Anadarko Petroleum Corp last November.
Tokyo Gas will not receive gas offtake from the project but Castleton Resources, which is also owned 70 percent by a unit of Castleton Commodities International, will sell the output, Tokyo Gas officials said.
"By taking an equity stake, we can get a variety of insight and we aim to expand our business in the natural gas value chain," Isao Hosoya, Tokyo Gas' senior general manager of global business development department, told reporters.
Tokyo Gas is not considering realising an LNG project from the joint venture because of a lack of pipeline connection to an existing LNG terminal, he said on the sidelines of a briefing on the acquisition.
Reporting by Osamu Tsukimori
