Management Policies
Strategic Overview- Interim Report FY2007-“New Horizons, Infinite Experience ”
Takashi Kubota
President and CEO
November 9, 2007

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Contents
1. Management Policies (April 2007)(1) Intellectual Property that Defines the Future：
Expand the Operating Base(2) Environmentally Friendly Technologies:
Strengthen Core Businesses(3) Humanity Conscious Management ：Strictly Enforce CSR-based Management
2. Key Factors in Our Operating Environment
3. New strategies that engender future growth:Diversify of Core Competence
4. Summary

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2１Management Policies (April 2007)“New Horizons, Infinite Experience ”“Steady Execution” : Increase in Factors Causing Uncertainty J
Reinforce Risk Management“Safety-first Culture” ： Horizontal Development of Sakhalin LNG Project
Project of the Year 2006 and 2007, Shell CEO HSE Award“Diversify of Core Competence”:
New strategies that engender future growthThree Management Pillars(1) Intellectual Property that Defines the Future:
Expand the Operating Base(2) Environmentally Friendly Technologies:
Strengthen Core Businesses(3) Humanity Conscious Management ：Strictly Enforce CSR-based Management

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3２

Key Factors in Our Operating Environment
The market remains strong, but uncertainty is growing→ Reinforce risk management

SOCIAL ENVIRONMENT

MARKET
Plant
Plantmarket
marketexpanding
expandingstrongly
strongly(Subcontractors(Subcontractorsfully
fullybooked
bookedwithwithprojects,
projects,shortage
shortage
ofofskilledskilledlabor)labor)The
Theriseriseofof
National
NationalOil
OilCompanies
Companies
(NOC)
(NOC)
Development
Developmentofof
communications
communicationsindustryindustry(IT,(IT,information
information
appliances,appliances,etc.)
etc.)

ECONOMY

Expansion
Expansionofofoil
oil&&gasgas
development
marketdevelopment market(LNG,(LNG,gasgaschemicals,chemicals,etc.)
etc.)

GlobalGlobalenvironment
environment/ /COCO2 reduction
reduction2(Kyoto(KyotoProtocol)
Protocol)Heightened
Heightenedinterest
interest
ininCorporate
CorporateSocial
SocialResponsibility
ResponsibilityGroup
Chiyoda Corporation

ChAS

Chiyoda Advanced
Solutions

Chiyoda Kosho

Chiyoda Keiso

Chiyoda Techno AceGroup Companies

EnergyEnergyconservationconservation/ /New
Newenergy
energy(GTL,(GTL,Biofuel,Biofuel,etc.)
etc.)

Economic
Economicgrowth
growthininBRICs
BRICs（Response（Responsetotorisingrisingequipment
equipment&&material
prices,material prices,etc.)
etc.)

HighHighcrude
crude
oiloilprices
prices(Expansion(Expansionofofheavy/lightheavy/lightpricedifferential)
price differential)

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ENERGY4２

Current Targeted Areas & Segments
Middle East

・LNG
・Gas Processing
・Oil & Gas
Development
・Refineries
・Chemical Refinery
Integration
・Petrochemicals
・Environmental
Protection

Asia/Pacific
・LNG
・Gas Processing
・Oil & Gas
Development
・Refineries
・Petrochemicals
・Biofuels
・Environmental
Protection

Russia/Africa,
etc.
・LNG
・Refineries
・Oil & Gas
Development
・Environmental
ProtectionJapan・Refinery Upgrading
・Chemical Refinery
Integration
・LNG Receiving
Terminals
・Fine Chemicals
・Environmental
Protection

Reinforcement of area business structure
and overseas operating bases

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5Market Outlook２(Prospective projects)

Asia & PacificBrowse LNG, Australia
Ichthys LNG, Australia
Darwin LNG T2, Australia
Gorgon LNG, Australia
Pluto LNG, Australia
Greater Sunrise, Australia
Pilbara LNG, Australia
Fertilizer, Bangladesh
BLNG, Brunei
Gas Upstream, Indonesia
Balikpapan RFCC, Indonesia
Tuban Refinery, Indonesia
Balongan RＦCC, Indonesia
CFB, Indonesia
Cepu Oil Development, Indonesia
Tangguh LNG T3, Indonesia
Donggi LNG, Indonesia
Oil & Gas Development, Indonesia
Cilacap Refinery, Indonesia
Petrochemical, Korea

PSR-3, Malaysia
Renewable Energy, Malaysia
MLNG Tiga Debottlenecking, Malaysia
Refinery, Malaysia
Balochistan Refinery, Pakistan
LNG, Papua New Guinea
Refinery Upgrading, Singapore
Petrochemical, Singapore
Lube Base Oil, Taiwan
Refinery, Taiwan
Ethylene Plant, Taiwan
Petrochemical, Thailand
Thai Oil Refinery, Thailand
NPC/PTT Refinery, Thailand
Refinery Expansion, Thailand
Refinery Upgrading, Thailand
Aromatics, Thailand
Second Refinery, Vietnam
Petrochemical, Vietnam

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6２ Clean Energy: Rapid Expansion of Natural Gas Shift
Proven Natural Gas Reserves:

LNG plant construction plans：

・・ ・・ ・

BP Statistical Review of World Energy 2007
2007

■World total: 6,405 TCF
1. Russia
2. Iran
3. Qatar

1,682
1,682 TCF（
TCF（26.326.3%）
993 TCF（TCF（15.515.5%）
895 TCF（TCF（14.014.0%）

WesternEurope

Source: Cedigaz (as of April 2007)

FormerSoviet Union&Eastern Europe
2,174 TCF：5 million tons x 40 trains：Projects currently underconstruction: FEED Projects: equivalent
to 12 trains

89 TCF

Middle East
2,593 TCF

Front-EndEngineering Design(FEED) Projects:*LNG

Africa500 TCF

Australia&Asia
523 TCF■2.4 billion tons

*Natural gas
development

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NorthAmerica
281 TCFCentral &SouthAmerica
243 TCF7

Group Operations

２

To deal with increasingly diverse challenges, we arestrengthening Group operations and reinforcing overseas
operating bases.
＊GES＝ Gｌobal Engineering Satellites in the Philippines and India

7,000Chiyoda

6,000GroupＧＥＳ*

5,600
5,100

6,300

6,400

1,320

1,380

2,000

2,000

2,980

3,020

07/3

07/9

1,100

5,000
920

4,000
2,000

3,000

2,000

2,000
1,000
0

2,180

05/3

2,500

06/3

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8３

New strategies that engender future growth:Diversify of Core Competence

New Challenges••••

Monetization of untapped gas at offshore locations
Diversification of alternative feedstock for energy and chemicals
Heavier sour crude and natural gas with more CO2 and acid gas
More stringent environmental regulations
To cope withabove challenges,
Chiyoda implements

1.
2.
3.
4.

Modularization initiatives for offshore gas processing/LNG Plants
Synthesis gas initiatives : GTL, Clean Coal Technology
Non-conventional oil initiatives :Desulfurization, Heavy Oil Cracking
Environmental protection initiatives

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9３

New strategies that engender future growth:Diversify of Core Competence

1. Modularization Initiatives for
Offshore Gas Processing/LNG–Increasing demand for offshore gas processing / LNG plants–Carried out various offshore LNG plant studies(FPSO, GBS and TLP)*–Ready to respond to the requirement of offshore gas
processing/LNG plants–Actively pursue modularization execution formation*FPSO: Floating Production Storage & Offloading, GBS： Gravity Based Structure,TLP：Tension-Leg Platform

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10３New strategies that engender future growth:Diversify of Core Competence

2. Synthesis Gas Initiatives– Increasing project opportunities related to synthesis gas due to
1. The natural gas value chain
2. Diversification of alternative feedstock (oil residues, coal)– Involved in the JOGMEC* GTL demonstration plant projectin Japan, and responsible for the synthesis gas section byutilizing Chiyoda’s patented CO2 reforming technology****Prior to this project, Chiyoda applied this CO2 reforming technology in the JOGMEC
pilot plant which was successfully completed in 2005

– Exploring coal to chemicals business scheme– Exploring hydrogen power business scheme*Japan Oil, Gas and Metals National Corporation

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11３New strategies that engender future growth:Diversify of Core Competence

3. Non-Conventional Oil Initiatives–Increasing demand for refinery products–Increasing opportunities for upgrading refinery residues–Application of commercially proven Eureka®* process forheavy residues–Solvent extraction process–Process development is in progress for ultra-heavy oilcracking–Actively pursue the elimination of residue portion with
*Co-licensed with Fuji Oil Co., Ltd.
gasification

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３New strategies that engender future growth:Diversify of Core Competence

4. Environmental Protection Initiatives– Increasing project opportunities due to more stringent environmental
regulations– Expand global market share for flue gas desulfurization【Chiyoda Thoroughbred 121 (CT-121) process and Chiyoda’s CASOX
process】– Maintain leading position for LNG, low sulfur transportation fuels production
facility construction– Utilization of cold energy technology for acid gas/CO2 capture and storage– Successful completion of carbon dioxide capture using LNG cold energy– Titania Catalyst for Ultra Deep Hydrodesulfurization of Diesel Oil :Licenses to a French company Axens

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13３

Diversify of Core Competence
To promote diversify of core competence, we are executing strategic
initiatives in project areas including LNG, gas processing, oil and gas
development, LNG receiving terminals, refineries, CRI, petroleum andpetrochemicals, pharmaceuticals, and environmental protection.
- Energy Security & Environmental Protection– LNG/Gas Processing and Oil and Gas Development: Middle East,Australia, Asia, Africa, Russia and elsewhere– Refineries, CRI: Large projects in Saudi Arabia and elsewhere, andprojects in Asia (including Japan)– Petroleum and Petrochemicals: Middle East, Asia (including Japan)– Fine Industries: Asia (including Japan)– Environmental Protection Projects: North America, Europe, Chinaand India

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14４Summary•Strengthen Domestic Operating Bases: Reinforce and promoteareas such as Plant Lifecycle Engineering•

Steady Execution of Overseas Contracts: Further strengthen riskmanagement.

•Strengthen Integrated Group Management of Overseas Operations:– In addition to the Middle East, respond to economic expansion
in Asia and Oceania– Reinforce overseas bases (engineering centers and salesoffices)

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Please address inquiries to:
Tomohiko Shirasaki,
Investor Relations Officer
Tel: +81-45-506-7538
Fax: +81-45-506-7085
e-Mail: tshirasaki@ykh.chiyoda.co.jp
URL： http://www.chiyoda-corp.com
Forward-looking Statements
The forecasts and plans in this presentation are based on information available to management on
November 9, 2007, the date these materials were prepared. Actual results may differ significantly fromthese forecasts for a number of factors, including but not limited to changes in economic conditions
and operating environment in Japan and overseas.

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