By Shariq Khan and David French
NEW YORK (Reuters) -Japan's top power generator JERA is in advanced talks to buy natural gas production assets in the U.S. for around $1.7 billion, people familiar with the matter said, the latest example of the Asian nation investing in America's energy sector.
JERA emerged as the top bidder for the assets owned by GEP Haynesville II, a joint venture between Blackstone-backed GeoSouthern Energy and pipeline operator Williams Companies, after banks solicited offers in recent
weeks, the people said, asking not to be identified because the discussions are private.
The deal would mark JERA's first foray in shale gas production, and give one of the world's largest liquefied natural gas (LNG) buyers more control of its supply chain as Japan prepares for a surge in power demand from data centers critical to the artificial intelligence boom.
The Japanese firm topped other bidders including multiple U.S.-based energy companies, according to the sources, who cautioned that a deal is not guaranteed and GEP could still turn to other bidders, or scrap the sale altogether.
JERA declined comment. GeoSouthern and Williams did not respond to comment requests.
A heavy importer of oil and gas due to its lack of domestic production, Japan has sought increased supplies from foreign allies since Russia's invasion of Ukraine roiled energy markets.
Interest in U.S. natural gas, particularly from Asian state-backed buyers, has also been bolstered by U.S. President Donald Trump's push to include more U.S. energy imports to resolve negotiations with the country's top trade partners.
A trade deal between the U.S. and Japan, finalized earlier this month, included commitments from Tokyo of $7 billion in annual energy purchases from the U.S.
JERA, a joint venture between Tokyo Electric Power Company and Chubu Electric Power, has been boosting its exposure to the U.S. LNG sector this year, including signing a letter of intent last week for potential supplies from Alaska's $44 billion LNG export project.
Reuters reported earlier that JERA had hired consultancy Wood Mackenzie to assess the proposed 800-mile (1,300-km) Alaska gas pipeline and LNG plant, a sign it was weighing support for the project.
GEP Haynesville II ranks among the top producers in the Haynesville shale basin of Texas and Louisiana, one of the largest natural gas-producing basins in the U.S. It was not immediately clear if GEP has any other assets besides the Louisiana acreage.
Its efforts to sell the Louisiana assets come at a time of growing buyer interest in the Haynesville play, allowing private equity backers to cash in profitably on their investments.
A first iteration of GEP was bought by Southwestern Energy for $1.85 billion in 2021 when U.S. gas prices hit 12-year highs.
The Haynesville has been long coveted due to its proximity to existing and planned LNG export sites on the U.S. Gulf Coast, with investors betting that approvals for new plants under the Trump administration will boost activity in the play.
GEP Haynesville II's full-year 2025 output is estimated to average about 317.5 million cubic feet per day (mcfd) this year, and is forecast to nearly double to 614 mcfd by 2028, according to consultancy Rystad Energy.
(Reporting by Shariq Khan and David French in New York; Additional Reporting by Katya Golubkova in Tokyo. Editing by Dawn Kopecki and Marguerita Choy)
