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LNG Boom Drove Japanese Investment Into Houston Up 34% In 5 Years

Between 2010 and 2015, Japanese-affiliated businesses in Houston grew by more than 34%. During the same time span, total trade between Houston and Japan grew from $2.2B to $5.1B.

Japan is now second only to Great Britain in terms of foreign investment into the Bayou City. The rapid growth in Japanese investment is in large part due to liquefied natural gas, which the Department of Energy expects will quadruple in capacity by the end of 2019. 

Panama Canal

Texas has been the primary target for Japanese businesses to expand to for three consecutive years, according to research by Japan Bank for International Cooperation. Japanese businesses like Toyota, which has its $1B U.S. HQ in Plano and operates a truck manufacturing plant in San Antonio, are choosing Texas for its geographic advantage, low cost of living, business-friendly environment and rich human and material resources.

“Texas sits at the center of the United States and is a gateway to Latin America,” JBIC Regional Head for the Americas Shinya Miyake said.

According to the Japanese government, Japanese firms have created more than 860,000 jobs in the U.S. through direct investment — with more than 50,000 of them in Texas — making Japan the No. 1 international job creator in the state.


Shahamah LNG carrier

“You can see how rapid the growth is in Houston,” Japan Business Society President Tadashi Takasugi said. “The very obvious reason is because of the shale gas revolution.”

Takasugi serves as senior vice president, head of chemicals for Mitsubishi Corp.

Japan is the world’s No. 1 importer of liquefied natural gas. This January, Japanese imports hit their highest point in five years, totaling nearly 8.7 million tonnes last month, up 8% over December as Japan deals with continued freezing temperatures.

The expansion of the Panama Canal, which enables LNG tankers to pass through, has made Asian markets more accessible to Texas and other Gulf Coast exporters.

Several Japanese power companies have opened U.S. offices in Houston, including Tokyo Gas, Chiyoda, Osaka Gas and JERA also now work in Houston.

“Many Japanese LNG companies have never had an office in Houston, but they’ve started new business here,” Takasugi said.

Freeport LNG

The Japanese government has its own vested interest in Houston. JBIC was founded in 2012 as a policy-based financial institution wholly owned by the Japanese government but with independent management. Tracing its roots back to the Export-Import Bank of Japan, JBIC promotes the development and securement of resources important to Japan.

JBIC is heavily invested in Houston, putting up a total of $3.8B at the Freeport LNG Development, a natural gas liquefaction and LNG export facility on Quintana Island near Freeport, Texas, about 70 miles south of Houston. The bank also financed $250M alongside NRG, Hilcorp and JX Nippon to construct Petra Nova, the world’s largest post-combustion carbon capture system.

At the LNG Producer-Consumer conference on Oct. 18, Japan’s Minister of Economy, Trade and Industry Hiroshige Seko announced a $10B financing initiative from the public and private sectors in Japan aimed at boosting demand for LNG in Asia.

Beyond LNG: Texas' Japanese Appeal


“Japanese companies are investing heavily in things they know well, they’re very familiar with high-speed rail and they’ve always been strong in chemicals,” Asia Chamber of Commerce President Milton Young said.

Japan Central Railway, the company that developed the system for the Japanese Shinkansen bullet train, is collaborating with Texas Central Partners to develop the Texas bullet train from Houston to Dallas.

At the G-7 Ise-Shima Summit in 2016, Prime Minister Shinzō Abe put forth Japan’s plan to implement quality infrastructure investments across the globe totaling around $200B over the next five years.  

But Japanese investment goes much deeper than that.

“Japan’s impact on Houston in terms of jobs, exports and investments tends to fly under the radar,” Japan-America Society of Houston President William Weiland said. The Japan-America Society of Houston is now in its 50th year. “The reality is Japanese businesses can be found in almost every sector of Houston’s economy.”

Rendering of Daikin property outside of Houston

For example, Japanese-based firm Daikin last year opened America’s second-largest air-conditioner factory in Hockley, about 40 miles northwest of Houston. It will eventually employ some 4,000 people.

The number of Japanese companies with offices in Houston has rapidly grown since 2012. There are 156 Japanese-affiliated companies with offices in the Houston area, according to the 2017 Japan Business Association of Houston directory. In the past six years, Japanese expats living in Houston have grown nearly 30%, to over 5,100 individuals. Thirteen Houston firms operate 20 subsidiary locations in Japan, including American Bureau of Shipping, BMC Software, Cameron International Corp., Chevron, Halliburton and Vinson & Elkins.


Young said that while the Japanese business community may not be the biggest international group in Houston, it has been here the longest. He said Japanese businesses started moving to Houston in the 1960s. Houston’s other large communities like the Vietnamese population did not arrive until the 1970s after the Vietnam War, and Koreans did not arrive in large numbers until the 1990s.

“Japanese companies have the most experience with American business practices. They understand the way America works,” Young said. “They have a head start in that understanding.”

The Japanese Business Association was officially founded in 1967, consisting of only 15 companies and 56 members. In 1967, there was only one Japanese restaurant in town. Now, JBA has 117 companies, over 800 members, and new sushi, ramen and poke restaurants are popping up across the city.

“I’ve seen more poke restaurants open in Houston in the last six months than I ever thought possible,” Young said.

Despite the proliferation of Japanese culture and flavors, Takasugi says the thing he misses about home is still the food.

“There’s still only four or five authentic Japanese restaurants in Houston," Takasugi said. “Authentic meaning expats will go.”

Takasugi first arrived in Houston in 1986. It was his first experience with the United States. In 2012, Mitsubishi moved him to Houston permanently. He said even though the city has nearly doubled in population since he first visited, he still loves it.

“All of the expats I know, including their families, are very happy here,” Takasugi said. “The people are nice.”


CORRECTION, FEB 6, 5:50 P.M. ET: A previous version of this story referred to Tokyo Gas as Tokyo Electric Company and has been corrected.