INTERVIEW: Tokyo Gas mulls participation in US Gulf Coast LNG project - CEO

Japan's Tokyo Gas is considering participating in a US Gulf Coast LNG project while also weighing additional LNG purchases from the US, President and CEO Shinichi Sasayama told Platts, part of S&P Global Energy.

"We are considering several [LNG] projects in that area," Sasayama said in an interview at the company's head office. "Investing in a liquefaction plant is one of the options, and, as in a recent case, entering into an LNG purchase contract is also an option."

"If there are favorable conditions among these, we may participate in a project. Even if we don't participate directly, we can build a portfolio through LNG purchase contracts and achieve similar effects, so we might approach it that way as well. It will depend on the situation," Sasayama added.

Tokyo Gas' consideration of securing more US LNG follows its recent signing of a long-term sale and purchase agreement with Venture Global to buy 1 million metric tons/year of LNG from the liquefaction terminal operated by the US producer and exporter on an FOB basis for 20 years, starting in 2030.

Tokyo Gas has also earmarked Yen 350 billion ($2.25 billion) for overseas investments in its mid-term business plan, covering fiscal year 2026-27 (April-March) through FY 2028-29.

"The majority of this [investment] will be in shale. We have already acquired interests, and our main focus will be on investments that ensure steady profits from those assets," Sasayama said.

"Additionally, we are involved in the midstream and downstream sectors, such as ARM, a trading company in which we have already invested. By utilizing these avenues, we will engage in marketing and trading within the US market," he added.

Tokyo Gas said April 1 that it has closed a transaction to acquire a 70% interest in Chevron's East Texas gas assets in exchange for $75 million paid in cash and $450 million as a capital carry to fund development within the Haynesville formation over multiple years.

The deal would increase US shale gas production at Tokyo Gas' majority-owned subsidiary, TG Natural Resources, to 1.4 Bcfe/d by around 2030, from about 1.2 Bcfe/d currently.

In February 2024, Tokyo Gas acquired a 49% stake in ARM Energy Trading, a company that procures and sells natural gas in the North American market.

Tokyo Gas imported 779,000 mt of LNG from the US in FY 2024-25, accounting for 6.7% of its total imports of about 11.556 million mt. The company holds a long-term contract to lift 1.4 million mt/y from the Cove Point LNG project in Maryland and another long-term contract for about 720,000 mt/y from the Cameron LNG project in Louisiana.

Alaska LNG

Tokyo Gas and Glenfarne Alaska LNG announced on Oct. 24 the signing of a letter of intent to offtake 1 million mt/y of LNG from the Alaska LNG project.

The latest LOI adds commercial momentum to Glenfarne's rapid progress in developing the 20 million mt/y project -- the only federally authorized export terminal on the US Pacific Coast.

Tokyo Gas' announcement of the new LOI with the Alaska LNG project is significant, as the project now has two original buyers alongside JERA -- a 50:50 joint venture between TEPCO Fuel & Power and Chubu Electric -- which has also signed an LOI for 1 million mt/y from the project.

Tokyo Gas was the first Japanese buyer to import LNG from Alaska's Kenai terminal in 1969, alongside Tokyo Electric Power Co.

"The LNG project in Alaska is geographically advantageous for Japan, as Alaska is relatively close and does not require passing through so-called 'choke points' that pose risks. In that sense, I believe it is well located geographically," Sasayama said.

"However, at this stage, the price and terms remain completely unclear, so it is difficult to say either yes or no," he said.

"Excluding price and terms, it is not a bad project. By expressing interest, we can proceed with further consideration and, after confirming the price and terms, make a final decision," he added.

Tokyo Gas' Alaska LNG LOI, alongside JERA's, was included in a fact sheet released by the White House on Oct. 28 as part of a list of major projects advancing Japan's previous $550 billion investment pledge, along with signed energy deals, following the US-Japan Framework Agreement signed by US President Donald Trump and Japanese Prime Minister Sanae Takaichi in Tokyo.

Sakhalin 2

Meanwhile, Tokyo Gas recognizes the need to be "mentally prepared for contingencies" regarding Russian LNG imports amid increased pressure, Sasayama said.

"I do believe the pressure is gradually increasing year by year. We need to be mentally prepared for contingencies," he said.

"We are not specifically considering alternative procurement at the moment, but we are keeping it as a possibility," he added. "I don't believe there is an immediate risk."

The Office of Foreign Assets Control of the US Department of the Treasury's general license related to Sakhalin 2 is set to expire at 12:01 am Eastern Standard Time on Dec. 19.

"There have been similar situations in the past, but appropriate measures have been taken, including by the government, and so far supplies have continued," Sasayama said. "Since we are not directly negotiating these matters, I think we will proceed in consultation with the government."

Tokyo Gas procures 14% of its total LNG imports from Russia under its 1.1 million mt/y long-term contract with the Sakhalin 2 project in Russia's Far East, which expires in 2033.