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01/23/2026 | Press release | Distributed by Public on 01/23/2026 12:28
Japanese Energy Companies Step Up U.S. Investments
Japanese Energy Companies Step Up U.S. Investments
Photo: STR/JAPAN POOL / JIJI PRESS/AFP/Getty Images
Commentary by Ben Cahill and Jane Nakano
Published January 23, 2026
Since mid-2025, some of Japan's largest exploration and production companies, gas and power utilities, and trading houses invested in U.S. natural gas assets. With the United States expected to supply up to one-third of global liquefied natural gas (LNG) volumes by the early 2030s, importers want to control more of their own supply base to mitigate the risk of rising U.S. gas prices. Japanese companies also anticipate strong gas demand from the U.S. power sector and industry. Their recent investments show the appeal of U.S. shale gas and LNG assets, but also suggest some risks associated with the dominance of LNG supply from the United States.
Several deals illustrate this investment trend. On January 16, 2026, Mitsubishi announced that it would acquire the equity interests of Aethon Energy, a large Haynesville Basin producer, for $5.2 billion (as well as $2.33 billion in assumed debt). Mitsubishi cited a desire to build an integrated natural gas supply chain in North America, and to increase production of gas that could supply domestic power plants, manufacturing and other industry, and, potentially, LNG export facilities. In December 2025, Tokyo Gas-one of Japan's largest gas utilities-stated that it plans to spend at least half of its $2.3 billion overseas investment budget in the coming three years in the United States. JAPEX, an exploration and production company with assets in Indonesia, Iraq, Norway, Russia, and the United States, spent $1.3 billion on oil and gas assets in Colorado and Wyoming. And several months earlier, Jera-Japan's largest power producer and one of the world's largest LNG buyers-made a $1.5 billion investment in the Haynesville Basin, which supplies numerous Gulf Coast LNG export facilities. These deals followed earlier investments by several other utilities and trading houses, and more acquisitions could follow.
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Japanese acquisitions in the shale patch are not a new phenomenon. In an earlier period of the shale revolution, from 2010 to 2012, companies including Itochu, Mitsui, Mitsui Oil Exploration Company, Marubeni, and Sumitomo made substantial investments in unconventional oil and gas assets. Like other investors, these companies wanted a foothold in a large-scale, rapidly growing resource base. They also sought to learn the fundamentals of short-cycle oil and gas development, which requires continuous drilling and completions, and prizes efficiency gains that lower costs and increase the productivity of each drilling rig. Many of these ventures were unsuccessful, especially as the steep oil price downturn of 2014-15 took a heavy toll. For example, Sumitomo took a $1.5 billion impairment in 2014 on its liquids-focused Permian Basin assets, and the following year Mitsui wrote down approximately $490 million on its Eagle Ford shale assets.
Today, the motivations for U.S. unconventional gas investments have evolved. When Jera announced its purchase of a Haynesville producer in October 2025, it cited "enhanced diversification for Jera's LNG value chain, expanded global reach across the gas value chain, and overall risk mitigation in a volatile energy market." These are important factors for a company that signed four long-term supply deals last year for 5.5 million tons per year in U.S. LNG. Jera, like other U.S. LNG buyers, values the volume growth and diverse supply options in the U.S. LNG industry, as well as the flexibility and hub indexation associated with U.S. LNG. Yet Japanese buyers are now exposed to North American gas price dynamics.
A potential concern is that higher Henry Hub gas prices will create a margin squeeze, as more elevated feedgas costs in the United States and lower LNG spot prices in Asia and Europe reduce arbitrage potential. Over the 20-year lifespan of a typical long-term sales and purchase agreement for U.S. LNG, this exposure to higher U.S. gas prices is a key risk. Aggregators or portfolio players, who hold offtake agreements for U.S. LNG but need to find end-users for their cargoes, are most vulnerable.
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One way for Japanese buyers to mitigate this risk is to move into the U.S. upstream sector. This allows them to enjoy the benefits of higher natural gas prices, rather than merely to suffer the knock-on effects as LNG buyers, thereby hedging their price risks. Greater integration may also be possible, if these companies use their operated gas supply as feedstock for LNG export facilities. Japanese companies may also gain some new insights into supply dynamics including service sector and labor costs. In short, Japanese companies that will increasingly depend on U.S. LNG want to be active rather than passive players in helping to control price risks.
There are parallels to past investments by Japanese companies in overseas gas development and liquefaction facilities, in countries including Australia, Qatar, and Southeast Asian exporters. It is debatable that such investments ultimately reduced supply risks-economic or otherwise-for Japanese LNG importers, but they helped develop Japan's global presence throughout the LNG value chain.
These business activities are occurring at a time when energy engagements between the United States and Japan are fast evolving in the context of bilateral tariff negotiations. As part of last year's U.S.-Japan trade agreement, Japan agreed to invest $550 billion in the United States. Energy is one of the seven areas that Japan has committed to investing in by January 2029, the end of Trump's second term.
Since Japan is the world's second largest LNG importer, a large U.S. LNG buyer-and the fifth-largest importer of U.S. crude oil and petroleum products-upstream gas assets would be a natural fit. To date, however, energy investments under discussion, as stipulated in a Japanese government fact sheet from late October, are primarily related to technology components and infrastructure, such as nuclear reactors, gas turbines, and generators. There has been no mention of energy resources as investment targets. As such, it is unclear if upstream oil and gas investment opportunities are shortlisted as the United States and Japan continue consultations. But recent deals are well aligned with the Japanese government view that investment in the gas sector can bolster energy security, with LNG identified as a practical means of energy transition. In fact, the country's Seventh Strategic Energy Plan (released in 2025) stresses the importance of direct Japanese involvement in upstream development and production. It states "Japan aims to increase its independent development ratio of oil and natural gas to 50 percent or more by 2030 and 60 percent or more by 2040."
Japan's appetite for natural gas continues to set the tone for strategic energy engagements between the two countries. Tokyo's latest trade commitments to Washington-separate yet related to the investment commitments-include "stable and long-term incremental purchases of U.S. energy, including LNG, totaling $7 billion per year, while exploring a new Alaskan offtake agreement for such LNG." Japanese companies likely see strategic value in the ability to influence gas production as they anticipate growing offtake from U.S. LNG projects. Japanese companies may be demonstrating a cautious approach in differentiating between gas investments in the Lower 48 versus Alaska LNG, with its extremely challenging project economics.
Japanese investments in U.S. oil and gas assets show the continued appeal of the country's resource base and the abundance of opportunities on offer in unconventional gas and LNG. Japan's energy security planning, the importance of U.S. LNG supply in Japanese portfolios, and the trade agenda and geopolitical backdrop suggest this trend will continue.
Ben Cahill is a senior associate (non-resident) for the Energy Security and Climate Change Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Jane Nakano is a senior fellow in the Energy Security and Climate Change Program at CSIS.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
© 2026 by the Center for Strategic and International Studies. All rights reserved.
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