Japanese Trading Firms Differing Strategies in U.S. Shale Expansion

Japanese trading firm Sumitomo is looking to expand its presence in the U.S. shale patch, despite exiting production operations three years ago. Instead of returning to production, Sumitomo will focus on increasing sales of pipelines used in U.S. shale fields and leveraging its strength in related businesses. According to President Shingo Ueno, the company sees shale as a valuable natural resource in the U.S. and is interested in expanding its role in this sector.

In contrast to other Japanese firms that have recently acquired U.S. shale assets as part of consolidation efforts, Sumitomo’s strategy is different. The company will not directly return to production but instead focus on expanding its presence through pipeline sales and leveraging existing strengths in related businesses. This approach sets Sumitomo apart from other Japanese companies investing in the U.S. shale industry, highlighting the diversity of strategies being employed by these firms.

Meanwhile, Tokyo Gas Co., Ltd has been expanding its upstream business in the U.S., acquiring superior assets around its existing holdings in Texas and Louisiana through subsidiary TG Natural Resources LLC (TGNR). The company aims to strengthen its position as a major player in the American oil and gas industry by acquiring high-quality assets.

Mitsui & Co., another Japanese firm, also recently completed the acquisition of an unconventional gas asset named Tatonka from Sabana, LLC and Vanna, LLC with access to the Gulf Coast industrial area including LNG export terminals and ammonia plants through a joint venture with Shell Oil Company LP (Shell). These partnerships and acquisitions highlight growing interest from Japanese firms in the U.S