Japanese Companies Expand Presence in US Shale Patch: Sumitomo, Tokyo Gas Co., and Mitsui & Co. Lead the Way

Sumitomo, a Japanese trading firm, is planning to expand its presence in the U.S. shale patch by increasing sales of pipelines used in these fields. The company previously exited shale production operations three years ago but is now looking to play a more prominent role without returning to direct production. In early 2021, Sumitomo sold its last production assets in the U.S. shale patch, including its oil-producing operations in the Eagle Ford and its Marcellus Shale Gas development project in Pennsylvania.

According to Sumitomo President Shingo Ueno, the company’s strategy is to leverage their strength in related businesses rather than directly returning to production. Ueno highlighted the importance of shale as a natural resource in the U.S. and expressed Sumitomo’s interest in expanding its presence in this sector. The company’s approach contrasts with other Japanese firms that have recently acquired U.S. shale assets as part of the ongoing consolidation wave in the American oil and gas industry.

Meanwhile, Tokyo Gas Co., Ltd has been expanding its upstream business in the U.S. through its subsidiary TG Natural Resources LLC (TGNR). The company aims to acquire superior assets around its existing holdings in Texas and Louisiana, signaling a growing interest from Japanese firms in the U.S. shale industry.

Mitsui & Co., another Japanese firm, also recently completed an acquisition of an unconventional gas asset named Tatonka from Sabana, LLC and Vanna, LLC located on Texas soil with access to Gulf Coast industrial area including LNG export terminals and ammonia plants.

Overall, these partnerships and acquisitions suggest a growing interest from Japanese firms towards the U.S