Tokyo Gas : FY2016 Initiatives by the Tokyo Gas Group

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FY2016 Initiatives by the Tokyo Gas Group

April 14th, 2016

Tokyo Gas Co., Ltd.

• The Tokyo Gas Group is pursuing the main policies during the fiscal 2015-17 of its Challenge 2020 Vision consisting of evolution of the total energy business, acceleration of global business development, and construction of a new group formation.

• The Tokyo Gas Group recognizes the fiscal year 2016 as an important year for the beginning of the era of energy mega-competition, given that retail sales of electricity will be fully liberalized and that the gas industry will face final stage for the entire liberalization.

• In the fiscal year 2016, given these surrounding environments, the Tokyo Gas Group will position the following five points and address each of our major challenges:

• Strengthening the approaches to ensure stable energy supply and security

(2 ) Advancing preparation for the new system in preparation for the full liberalization of the gas retail market in April 2017; promoting the development of new services and rates menu based on the needs of our customers.

1. Expanding low voltage electricity sales to facilitate the start-up of electricity power.

2. Making full-scale participation in the overseas business leveraging the solid overseas bases.

3. Aiming at the realization of "integrated energy company group" to establish and strengthen the group management and systems, including the subsidiaries.

• To secure stable and inexpensive LNG supplies, we will further promote the "diversification of procurement," the

  "diversification of agreements" and the "diversification of LNG network."

• By further strengthening and expanding the cooperation with domestic and foreign LNG players, we will continue to achieve a flexible and price competitive procurement of LNG.

Diversification of procurement We will commence receiving LNG from the Gorgon LNG project, which will allow us to secure LNG suppliers involved with 12 projects in five countries.

※LNG procurement from America will start after FY2017

Diversification of LNG network

We will enhance LNG trading structure and strengthen the network with international LNG players.

Framework for exchange and flexibility of LNG

LNG

• To secure stable gas supplies and as well as to "expand natural gas usage," one of the purposes of the gas system reform, we will proceed with the development and enhancement of the pipeline network and manufacturing infrastructure.

• For further improvement of services and the realization of energy solution in combination of gas, electricity, and value-added services, we will integrate our city gas companies in the group of the Tokyo metropolitan and the neighboring areas.

Enhancement of the pipeline network

To address the demand outlook appropriately and strengthen the stable supplies through circular pipeline processing, we will commence the construction work of Ibaraki Trunk Line serving as a bridge between Chiba-Kashima Line and Ibaraki- Tochigi Trunk Line/Hitachi LNG Terminal that started operation in fiscal year 2015.

Enhancement of the production infrastructure

We will advance the construction of the additional Vaporizer (completed in December 2018) and additional LNG storage tank (completed in the fiscal year 2020) in Hitachi LNG Terminal and promote the precise design for the additional

Ibaraki Tochigi Trunk Line

Hitachi LNG

Terminal

Ibaraki Trunk Line (plan)

LNG tank in Sodegaura LNG Terminal(completed in the fiscal year 2023).

Restructuring integration within the group

In May 2016, we will implement the merger of Chiba Gas Co., Ltd., Tsukuba Gakuen Gas Co., Ltd. and Miho Gas Co., Ltd. into Tokyo Gas.

Negishi LNG Terminal

Ohgishima LNG

Terminal

Chiba-Kashima Line

Sodegaura LNG

Terminal