Tokyo Gas Co Ltd will spend 69 billion yen ($657 million) to take control of a US shale gas operator, Castleton Resources, and to buy a US solar power development project in a bid to expand its overseas operations, it said on Wednesday.

The move reflects a long-term strategy mapped out by Japan’s biggest city gas supplier last year, which includes stepping up overseas expansion and boosting stakes in renewable energy and liquefied natural gas (LNG) development operations.

The Japanese company will invest about 20 billion yen to raise its stake in Castleton to 70% from 46% through buying new shares to be issued by the US operator to finance the planned acquisition of additional gas assets in Louisiana, Koji Yoshizaki, senior general manager of Tokyo Gas, said.

“As US shale gas prices have fallen sharply, we think it is a good time to buy stake in gas assets at a relatively cheap price,” Yoshizaki told a news conference.

The deal, which marks Tokyo Gas’ first purchase of a US shale gas operator, will be completed on Aug. 14.

The acquisition of the additional gas assets will boost Castleton’s output to 473 million cubic feet a day from 296 million cubic feet now.

Tokyo Gas will also pay up to 49 billion yen to purchase the 630 megawatts Aktina solar power project in Texas from Hecate Energy, a US renewable energy developer.

Construction of Aktina will start in Q3, 2020 and will be brought online in blocks starting in mid-2021.

The acquisition, to be completed on August 6, will increase Tokyo Gas’ renewable energy assets to 1.2 gigawatts (GW), a step closer to its 2030 goal of 5 GW.

“US power demand will grow, with natural gas and renewable being driving force as they are expected to replace coal in a long-term,” Yoshizaki said.

Reuters