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Osaka Gas lines up Texan shale deal
FINANCE & INVESTMENT
JAPAN’S Osaka Gas has struck a deal to buy the entirety of Sabine Oil & Gas Corp. from parent company Sabine Oil & Gas Holdings for $610mn. e deal was announced on July 29. A number of Japanese companies have attempted deals in the US’ shale sector but most have ended badly. Osaka Gas also holds a stake in Freeport LNG.
Sabine’s shale gas holdings are seen as com- plementary to Osaka Gas’ Freeport LNG, which is also in Texas. Holding equity in the upstream will provide the Japanese company with upside should gas prices rise, acting as a hedge to its liq- uefaction exposure. Osaka Gas also has power generation assets in the US.
The shale company has around 175,000 net acres (708 square km) in east Texas, in the Har- rison, Panola, Rusk, and Upshur counties. It pro- duces 210mn cubic feet (5.9 mcm) per day, from around 1,200 wells, with additional drilling options in the Haynesville and Cotton Valley formations.
Osaka Gas acquired a first 35% stake in the acreage in Sabine’s eastern assets, which it bought in June 2018 for $146mn. Since this time, the Japanese company said these assets had been producing more than had been expected and, as a result, generating stable cash ow. Osaka Gas went on to note it would integrate Sabine’s management and opera- tional capacity into its own.
The Japanese company has a long-term plan, “Going forward, beyond borders 2030”, that puts overseas energy markets as one of its growth areas. Sabine was established in 2006. It launched a competitive sales process, with Ten- Oaks Energy Advisors, with bids being submit- ted by the end of June.
Osaka Gas, with Chubu Electric, signed up to participate in the Freeport LNG project in Feb- ruary 2014. e two took a 25% stake in the rst train, with both companies committing to invest around $600mn.™
Australian gas study uses project data for first time
AUSTRALASIA
PROJECTS & COMPANIES
A new scienti c study using commercial data from an active Australian lique ed natural gas (LNG) project has found that using natural gas instead of coal in Australia’s power sector could reduce greenhouse gas (GHG) emissions by up to half.
e report, published by CSIRO’s Gas Indus- try Social and Environmental Research Alliance (GISERA) on July 29, may not be groundbreak- ing, but it is the rst ever study to use commercial data from an active coal-bed methane (CBM) to LNG project in Queensland in its research.
CSIRO said: “A unique feature of the research is the use of commercial-in-con - dence data from a [CBM] to LNG project in the Surat Basin, Queensland [providing] for
the rst time accurate estimates of whole of life [GHG] emissions associated with CSG-LNG operations in Australia.”
The report noted that switching from black thermal coal to Queensland CBM for local power generation using high-e ciency closed cycle gas turbines (CCGTs) could reduce GHG emissions by around 50%. is consideration is based on the gas production and treatment but excludes the liquefaction, shipping and regasi cation processes required to export gas to Asian markets.
CSIRO added that GHG emissions stem- ming from production, treatment and lique- faction of the CBM represented 1.4% of the unnamed project’s likely future production,
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w w w . N E W S B A S E . c o m Week 30 31•July•2019