Tokyo Gas to Invest in US Downstream Assets to Drive Growth
(Bloomberg) -- Tokyo Gas Co., Japan’s biggest distributor of the fuel, plans to invest in US downstream assets to lift earnings and reinforce the last leg of its energy supply chain.
The company is looking to deploy capital in assets like liquefaction plants, export terminals and the energy services sector, said Tokyo Gas President Shinichi Sasayama. “We’ve already made investments in midstream, downstream areas such as marketing and trading, and we intend to raise profitability,” he said in an interview.
Tokyo Gas shares rose as much as 2.3% during Monday morning trading hours, while the broader Topix index fell as much as 0.4%.
The firm’s planned expansion in the US comes as President Donald Trump rolls back climate commitments and elevates fossil fuels in national security planning. A surge in power use from artificial intelligence and data centers is boosting demand for gas-fired electricity, creating favorable conditions for energy producers.
Tokyo Gas has allocated 350 billion yen ($2.2 billion) for overseas investments for the next three years starting from fiscal 2026, according to a strategy document released in October. However, a spokesperson declined to say on Friday how much the company has earmarked for downstream expansion in the US.
Sasayama said much of that money will go toward developing and making the company’s shale gas assets profitable. Any decision to increase spending on upstream assets will depend on circumstances at the time, he added.
Tokyo Gas’ US subsidiary bought Rockcliff Energy II LLC, a Texas natural-gas producer, in late 2023 for about $2.7 billion. It also acquired a stake in gas marketing and trading firm Arm Energy Trading LLC in 2024.
The Japanese utility drew attention last year after activist Elliott Investment Management disclosed a 5% stake. Elliott initially pressured Tokyo Gas to divest parts of its multibillion dollar real estate portfolio and boost shareholder value.
Sasayama said the company has drawn up a list of target assets to sell moving forward, although he refrained from identifying any specific properties. Tokyo Gas will continue to hold onto the real estate assets that complement its core energy business, including properties equipped with energy-supply facilities, he said.
(Updates with share move from Monday trading hours in third paragraph.)
©2025 Bloomberg L.P.
