OREANDA-NEWS. Tokyo Gas Co., Ltd. compiled Challenge 2020 Vision (“Vision”) in November 2011 to indicate the path for the Tokyo Gas Group toward 2020 as a top runner in the field of natural gas, in order to boost the value we provide to customers and society and contribute to national economic development and the improvement of the national standard of living. The Vision aims at enhancing the LNG value chain from LNG procurement and transportation through to the production and supply of city gas and the provision of energy solutions which resolve diverse customer energy issues.

The Group has been steadily implementing efforts toward achieving the Vision, and this release summarizes the main efforts since October 30, 2012 when the progress status was last announced.

In raw materials procurement and overseas business, Tokyo Gas has been working to reduce raw materials prices by diversifying suppliers and contract contents, and to expand overseas business. In April, 2013, Tokyo Gas decided to procure LNG from the Cove Point LNG Project aiming to import U.S. natural gas LNG, including shale gas, to Japan starting around 2017. This is the first Tokyo Gas long-term LNG contract that imports LNG at a price linked to U.S. natural gas market prices. In March 2013, Tokyo Gas reached a transaction agreement with Quicksilver Resources Inc. (“QRI”) to acquire a 25% interest in QRI’s shale gas development business at the Barnett basin in Texas, U.S. Tokyo Gas also signed an agreement in February 2013 to purchase U.S. LPG at a price indexed to U.S. propane market prices.

In efforts to upgrade and expand the production and supply infrastructure, in April 2013 the joint LNG terminals with Tokyo Electric Power Company (TEPCO) began to discharge low-calorie LNG for LNG thermal power plants and high-calorie LNG for city gas. By decreasing the receipt of LPG for city gas and increasing the receipt of LNG for electric power generation, Tokyo Gas is advancing stable and efficient energy supply in the Tokyo Metropolitan Area.

What is more, in February 2013 Tokyo Gas decided to accelerate the upgrading of the natural gas infrastructure in Ibaraki Prefecture to respond to the growing demand for natural gas and improve the overall stability of the prefectural energy supply infrastructure. In addition to steadily implementing the construction works at the Hitachi LNG Terminal and the Ibaraki-Tochigi Line which are already underway, Tokyo Gas also reached an agreement with Tobu Gas Co., Ltd. on the joint construction of a new pipeline for the Mito area. In the construction of the Hitachi-Kashima Line (provisional name), examinations have begun on a land route and a seabed route toward an early start of operations by 2020.

In energy solutions, Tokyo Gas is promoting the spread and expansion of distributed energy systems and of gas appliances that contribute to cuts in peak electricity demand. Sales of ENE-FARM residential fuel cells, co-generation systems and gas fueled air-conditioning systems are steadily increasing. Efforts to promote the advanced utilization of natural gas and fuel conversion are moving forward with the development of approximately 500 million m3 in demand in FY2012 along with the initiation of supply through the Chiba-Kashima Line in March 2012, Tokyo Gas will continue striving to enhance the LNG value chain toward achieving Challenge Vision 2020.