Mitsui & Co in $680m deal to develop Texas Eagle Ford shale gas

HOUSTON (ICIS)--Mitsui & Co has agreed to take a 12.5% working interest in SM Energy’s Eagle Ford shale gas property in Texas, the Japanese industrial and trading major said on Thursday.

Under the deal, Mitsui, through a subsidiary, will “carry up to $680m (€469m) of SM Energy’s future development cost” of the 47,000-acre (19,000ha) project, it said.

Eagle Ford is considered to be one of the “most attractive shale plays” in the US, it said, along with Marcellus in the country's northeast – in which Mitsui also has a stake.

“We have expanded our shale oil/gas portfolio in the US and Poland, and aim to expand our shale business into other countries, leveraging our global network and the knowledge acquired through these projects,” the company said.

Ethane extracted from Eagle Ford shale gas could be a source of feedstock for a cracker Dow Chemical plans to build on the US Gulf coast.

Dow has signed ethane and propane supply contracts based on Eagle Ford shale gas.

($1 = €0.69)