Mitsubishi Corp. bolstered access to natural gas supplies for its North American export projects by taking full ownership of oil and gas marketer Cima Energy Ltd.
Mitsubishi, which already held 34 percent of Cima, took control of the Houston-based company, it said Wednesday, without providing a value for the transaction.
Mitsubishi will use Cima to secure supplies for liquefied natural gas export projects it holds stakes in, which include Cameron LNG in Louisiana and LNG Canada in British Columbia. Cima trades about 1 billion cu. feet (28.3 million cu. meters) of gas a day, according to Mitsubishi.
Mitsubishi originally bought a piece of Cima in 2008 to market natural gas supplied from LNG imports. The subsequent U.S. shale boom upended those plans, turning many of the prospective U.S. LNG import terminals into export projects.
“Cima will play a key role in assisting feed gas procurement as well as the transportation and delivery of natural gas to Mitsubishi Corp.’s LNG projects,” the Japanese company said in a statement. The purchase “is expected to strengthen Mitsubishi Corp.’s LNG value chain.”
Mitsubishi’s move comes as LNG prices are pacing a collapse in oil amid a global supply glut and tepid demand from utilities amid cheaper alternative fuels. New LNG projects coming online in the U.S. and Australia, the gradual restart of nuclear reactors in Japan, the world’s biggest buyer of LNG, and low coal prices are driving prices lower, analysts at Citigroup Inc. said in a report Tuesday.
The spot price for LNG shipped to northeast Asia has tumbled to $6.45, matching the lowest in data going back to 2010, according to New York-based Energy Intelligence Group.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.