Tokyo Gas aims to expand into mid- and downstream operations in the US and into LNG trading, under a future growth strategy released to coincide with its 140th anniversary this year.
The Japanese energy company is targeting an 8% return on equity in 2025 and net income of Y131bn, focusing on the three key strands of domestic energy, urban development and overseas business.
Alongside LNG, another key international driver will be “ensuring profitability in our shale gas business,” the company said.
Tokyo Gas’s decision to expand its buyback programme and implement additional measures to enhance capital efficiency and accelerate growth last month was welcomed by fund manager Elliott Investment Management and Elliott Advisors (UK), which advise funds that have a substantial investment in the company.
“We view these measures as meaningful first steps to unlock the substantial value embedded in Tokyo Gas’s asset base,” it said in a statement.
In 2024, Tokyo Gas America, a wholly owned subsidiary, established two further subsidiaries – TGAM Trading and TGARM Investment – in the US to promote its gas marketing and trading in North America. Through the newly established subsidiaries, Tokyo Gas has bought a 49% equity interest in energy marketing and infrastructure firm ARM Energy Trading. TG Natural Resources (main photo) is focused on consolidating its East Texas and North Louisiana platform through strategic acquisitions.
In August 2023, Tokyo Gas linked with Osaka Gas Company and Toho Gas Company and Mitsubishi Corporation to announce an agreement with Sempra Infrastructure, a subsidiary of Sempra, to evaluate a proposed project to produce e-methane through a form of carbon recycling. The project is on the US Gulf Coast.
Another highlight last year saw Tokyo Gas and its engineering solutions division complete a pilot demonstration of high-purity recovery of carbon dioxide generated during the distillation process at Suntory Hakushu distillery – the first time in Japan that the solid sorbent process has been used to recover high-purity CO2 in the beverage industry.
The pilot project used a small-scale CO2 separation and recovery device. Suntory Holdings is also working with Tokyo Gas on using hydrogen technology.
The European Commission’s recently published Affordable Energy Action Plan stated that Europe should consider following the same path as Japan, which encourages direct overseas investment in export projects and joint purchasing by European importers.
However the Japanese model of LNG investment is not suitable for Europe, according to a new paper from the clean energy-leaning think tank the Institute of Energy Economics and Financial Analysis (IEEFA), which argues that Japan’s complex, costly and multi-faceted approach is not really a good blueprint for Europe to follow.
In other news, Mitsui OSK Lines (MOL) has signed a deal to purchase 30,000 carbon removal credits from direct ocean capture (DOC) technology developed by carbon removal specialist Captura, based in California.
