Japanese energy firm JERA is in advanced discussions to buy shale gas assets in the United States worth about $1.7 billion, sources with knowledge of the talks have told Reuters.
If a deal is finalized, this would be a major investment from Japan in the U.S. energy industry, per the U.S.-Japan trade agreement.
JERA, Japan’s biggest power producer, has emerged as the top bidder to buy assets currently owned by GEP Haynesville II in the Louisiana shale basin Haynesville, according to Reuters’ sources.
GEP Haynesville II is a joint venture (JV) between GeoSouthern Energy and Williams Cos, and operates around 50,000 net acres in the Haynesville shale formation.
Japan and JERA are exploring offtake agreements to buy LNG from the planned export project in Alaska as part of the Japanese pledge to buy $7 billion worth of U.S. energy products.
Earlier this month, U.S. President Donald Trump signed an executive order to implement the U.S.-Japan trade agreement reached in July.
Under the agreement, Japan gets a 15% tariff on its goods and pledges to buy $8 billion worth of American products per year. The Government of Japan has agreed to invest $550 billion in the United States, the White House said.
Japanese companies have been considering investments in the $44-billion Alaska LNG project, but they have appeared to be concerned that the costs may be too high, considering the cold weather in Alaska and the scale of the pipelines needed to bring the project on stream. But after the trade agreement, Japan is now actively considering offtake deals.
JERA, in particular, is reportedly considering joining companies making commitments for purchases of liquefied natural gas from the Alaska LNG project, with a preliminary letter of intent mentioning 1 million tons annually over a 20-year period.
The developer of the $44-billion Alaska LNG project, Glenfarne, has been busy in the past months finding companies willing to make offtake commitments. The company is yet to make a final investment decision on Alaska LNG, but plans to make one for the facility’s pipeline by the end of the year, and another for its export terminal in 2026.
By Michael Kern for Oilprice.com
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