Entering the US shale gas industry for the first time! Rumor has it that Japan's largest power producer JERA plans to buy GEP Haynesville II assets for 1.7 billion US dollars

The Zhitong Finance App learned that, according to people familiar with the matter, Japan's largest power producer JERA is in in-depth negotiations to buy US natural gas production assets for about 1.7 billion US dollars. This is the latest example of an Asian country investing in the US energy industry. People familiar with the matter said JERA became the top bidder for GEP Haynesville II assets after banks solicited offers in recent weeks. GEP Haynesville II is a joint venture between Blackstone (BX.US) -backed GeoSouthern Energy and pipeline operator Williams Companies (WMB.US).

The deal will mark JERA's first entry into shale gas production and give it more control over the supply chain as one of the world's largest buyers of liquefied natural gas (LNG). As Japan prepares for a surge in data center electricity consumption brought about by the AI boom, this strategy is significant.

According to people familiar with the matter, the Japanese company defeated other bidders, including several US energy companies. However, they also warned that the deal is not yet settled, and GEP may still switch to other bidders or simply cancel the sale.

GEP Haynesville II is one of the top producers in the Haynesville shale basin in Texas and Louisiana, which is one of the largest gas producing regions in the US. It is currently unclear whether GEP has assets other than the Louisiana leased block.

The Haynesville shale basin has always been sought after due to its proximity to existing and planned LNG export sites along the US Gulf Coast. Investors are betting that the Trump administration's approval of more new plants will further boost activity in the basin.

According to estimates by consulting firm Rystad Energy, the average daily production of GEP Haynesville II for the full year of 2025 is expected to be about 3175 million cubic feet, and is expected to almost double to 614 million cubic feet by 2028.

Japan has been heavily dependent on oil and gas imports due to a lack of domestic production capacity. Since the Russian-Ukrainian conflict disrupted the energy market, Japan has sought to increase supply from foreign allies. US President Trump's push for more US energy exports to be included in negotiations with major trading partners has also boosted the interest of buyers led by Asian countries in US gas. The trade agreement reached between the US and Japan earlier this month included Japan's commitment to purchase energy worth 7 billion US dollars from the US each year.

JERA was established as a joint venture between Tokyo Electric Power Company and Chubu Electric Power Company. Since this year, JERA has continued to expand its layout in the US LNG sector, including signing a letter of intent last week to obtain potential supply from Alaska's LNG export project worth 44 billion US dollars. Earlier reports suggest that Japan has hired consulting firm Wood Mackenzie to evaluate the proposed 800-mile (1,300km) Alaskan gas pipeline and LNG plant, indicating that Japan is considering supporting the project.