Media: Toshiba to sell U.S. LNG business to China's ENN Energy Holdings
Tokyo. Toshiba will sell its U.S. liquefied natural gas business to Chinese gas producer ENN Energy Holdings by the end of this fiscal year, the Nikkei learned Thursday. The deal is expected to incur a loss of nearly 100 billion yen ($880 million) for Toshiba, Nikkei Asian Review reported.
Toshiba announced the sale of the unit on the same day and will disclose the name of the buyer after the transaction is finalized.
Earlier estimates put the potential loss to the troubled Japanese electronics maker as high as 1 trillion yen, given volatile LNG prices. Toshiba is trying to turn itself around by jettisoning loss-making businesses.
In a rare move for an electronics company, Toshiba in 2013 entered the LNG business in the U.S. state of Texas. The company has a stake in a business that turns U.S. shale gas into LNG. The operation is committed to selling about 2.2 million tons of LNG a year for 20 years, starting in 2019. The value of the sale to the private Chinese gas company has not been disclosed, informs Trend.
ENN is a major gas producer and is listed on the Hong Kong stock exchange. In China, the company supplies gas in cities, operates pipelines and engages in gas trading. The company's total annual sales of natural gas, at 19.6 billion cubic meters, are nearly 30% larger than those of the largest Japanese gas company, Tokyo Gas.
The Chinese company has greatly expanded its transactions in recent years, signing LNG procurement contracts with other energy companies, such as U.S.-based Chevron and Total of France. ENN's purchase of Toshiba's LNG business in the U.S. appears aimed at diversifying its sources of supply.
Around 10 companies, including major U.S. gas producer Tellurian and PetroChina, were thought to have been interested in acquiring the Toshiba asset.