JERA Co. Inc. agreed to boost its holdings in Freeport LNG through a $2.5 billion investment in the Houston-based LNG export company as JERA, the world’s biggest buyer of LNG, aims to shore up long-term supplies of gas for power generation in Asia.

“JERA believes it will be possible to supply LNG to Japan when supply is tight and to otherwise respond flexibly to the LNG supply and demand situation in the Asian region,” JERA said in a Nov. 15 release announcing the transaction.

According to the release, JERA, which already has a share of Train 1 of Freeport LNG, agreed to acquire Global Infrastructure Partners’ 25.7% interest in Freeport LNG Development LP for $2.5 billion, subject to customary purchase price adjustments. GIP’s second flagship fund, Global Infrastructure Partners II, acquired the stake in 2015.

Freeport owns and operates an LNG export facility with 15 million metric tonnes per year (mtpa) of nominal liquefaction capacity on the U.S. Gulf Coast near Freeport, Texas. The company plans to expand by adding a fourth liquefaction train, which has received all regulatory approvals for construction.

A major supplier of electricity in Japan where the company is headquartered, JERA has been promoting the adoption of greener fuels. However, JERA has also included gas-fired power generation in its decarbonization plan citing the use of natural gas, which emits less CO₂ than power generation using other fossil fuels, as a flexible supplement to intermittent renewable energy.

“As evidenced by the current gas price hikes around the world, securing a stable supply of competitive LNG is becoming increasingly important,” the company noted in the release.

As a result of the transaction announced Nov. 15, JERA said it will not only be involved in the entire existing Freeport LNG project but will also work to advance new LNG projects including production capacity expansion and the development of Train 4.

Today, Freeport is the seventh largest LNG facility in the world, the second largest in the U.S., and the only U.S. facility to use electric motor-driven technology, emitting 90% less CO₂ than a comparable gas turbine-driven facility, according to a separate joint release.

For the transaction, JERA Americas Inc., the Houston-based subsidiary of JERA, appointed Goldman Sachs & Co. LLC as its exclusive financial adviser and Sidley Austin as its legal adviser. The Sidley deal team was led by Houston-based partner Brian Bradshaw. Other Sidley partners involved included Cliff Vrielink, Heather Palmer, Zackary Pullin and Jim Mendenhall.

Rothschild & Co. and Mizuho Securities USA LLC are serving as joint financial advisers and Simpson Thacher & Bartlett LLP is serving as legal adviser to GIP.

Separately, GIP also announced on Nov. 15 the purchase of a stake in an LNG project in Australia from Woodside.

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