Diversification

The Tokyo Gas Group is determined to increase earnings as a diversified energy services company by carryingout core gas operations as well as operating energy-related businesses that complement and add value tothose operations. Furthermore, to respond to the IT revolution and Japan’s “graying” society as well as contribute to environmental protection, Tokyo Gas is actively promoting various new businesses such as urban
development and information-related businesses that transcend the bounds of the energy sector. In respectof our 49 subsidiaries, we are working to raise their profitability and foster autonomy with a view to taking
them public in the future. These actions are being taken in line with our Medium-Term Management Plan.
This plan also calls for the streamlining of unprofitable businesses to maximize consolidated earnings.

Subsidiaries and Affiliate
Company

22Equity
AreaInterest (%)

Tokyo Gas Energy Co., Ltd.
Tokyo Gas Chemicals Co., Ltd.

100100

Energy sales
LNG cryogenic energy

Tokyo Oxygen and Nitrogen Co., Ltd.
Tokyo Gas Urban Development Co., Ltd.
Park Tower Hotel Co., Ltd.
KANPAI CO., LTD.

54
100
10093.2

LNG cryogenic energy
Urban development
Urban development
General facility construction

Gastar Co., Ltd.
TG Credit Service Co., Ltd.

66.7
100

Home equipment services
Home equipment services

Chiba Gas Co., Ltd.

99.9

Gas distribution

Tsukuba Gakuen Gas Co., Ltd.
Tokyo Gas Engineering Co., Ltd.

100
100

Gas distribution
General engineering

TG Information Network Co., Ltd.

100

IT

TG Enterprise Co., Ltd.

100

New businesses

Tokyo LNG Tanker Co., Ltd.
Gas Malaysia Sdn. Bhd.*

10020

LNG transportation businesses
Overseas businesses

Business
Sales of LPG and coke
Sales of gas for industry and chemicals, LNG cryogenic
energy technologies
Production and wholesale of liquefied oxygen and nitrogen
Real estate leasing, management and brokerage, etc.
Management of Park Hyatt Tokyo
Construction of gas, water and air conditioning facilities,
as well as gas pipelines
Production and wholesale of gas appliances
Leasing of gas appliances and information and communications equipment, construction loans
Gas supply for Yachiyo and Narita City and surroundingareas
Gas supply for Tsukuba Science City and surrounding areas
Comprehensive engineering services with a particular focus
on Gas production and supply, environmental protection
and IT
System design; construction, operation and maintenanceof networks; and sales of computer equipment, etc.
Financial administration and building leasing for Tokyo
Gas and related companies
Ownership of LNG and LPG carriers
Supply of gas in Malaysia* Equity-method affiliate

LEFT
A room at the Park Hyatt Tokyo, managed by Park Tower
Hotel Co., Ltd. The modern interior and superb view ofthe Shinjuku district make a stay a truly memorableexperience.
RIGHT
This ultra-low-temperature, deep-freeze warehouse fortuna is one example of the cryogenic utilization of LNG.

TOKYO GAS Annual Report 2001

Topics
Branching Out Into the Information & Communications Business
In June 2000, Tokyo Gas reached an agreement with Marubeni Corporation and Vectant, Inc.,a wholly owned Marubeni subsidiary, to deliver next-generation high-speed broadband communications over the “last-mile.” As part of the agreement, Tokyo Gas acquired an equity
stake in MetroAccess Co., Ltd., a Type 1 telecom carrier established by Marubeni and Vectant.
Drawing on and fusing their collective infrastructures, expertise and client networks, the threecompanies expect to derive dramatic synergies in developing infrastructure for broadband
networks. Since high-capacity optical fiber cables can be laid in channels owned by Tokyo Gas
for district heating and cooling conduits, cost-competitive networks will be realized. In April
2001, MetroAccess launched broadband data communications services for companies in theShinjuku metropolitan area, Tokyo.
Energy providers in the future must be more dimensional than simply supplying energy.
They must also develop innovative business models that harness information and communications technologies. From the perspective of acquiring new expertise, Tokyo Gas’ entry into
this business marks a first step toward formulating new strategies in the information andcommunications industry.

Home Reform Agency Services for Comfortable Living Environments
In April 2001, Tokyo Gas teamed up with INAX Corporation and other companies to establish
HomeClip Corp., which offers online home reconstruction agency services. In recent years,
23

there has been a groundswell of interest toward creating comfortable living environments, particularly developing barrier-free housing as Japanese society ages. There is also a need to refurbish antiquated living accommodation. The size of the home reform market is estimated ataround ¥10 trillion. Consumers are demanding services that give them easy access to comprehensive information on construction firms, products, price and other areas. HomeClip operates
a one-stop portal site that “clips” various information on the “home” onto the Internet. The siteallows users to gather information, select construction firms and even request estimates. It plays
the instrumental role of introducing consumers to reliable refurbishing companies.
HomeClip’s earnings are derived from registration charges and annual fees from refurbishing companies, agency commissions, and advertising revenues. The site aims to register(http://www.homeclip.co.jp)

10,000 firms and serve 200,000 registered members in the next 5 years.

Key Ingredient for Breakthrough Diagnostic Method
Tokyo Gas has been working on the world’s first process to separate and condense 13C-Methane from LNG. The first shipments were made in May 2000, following completion of a plant toproduce 13C-Methane for commercial use using this technology. The 13C-Methane is being
processed into 13CO2 by Tokyo Gas Chemicals and sold to Otsuka Pharmaceutical Co., Ltd. foruse in a breakthrough drug that we developed with them. The drug diagnoses the existenceof Helicobacter pylori, a common cause of gastritis and gastric ulcers, and makes for morepatient-friendly diagnosis of these ailments. The drug was awarded the Japanese Prime Minister’sAward of the Japan Industrial Technology Grand Prize in fiscal 2000. This drug is currently
marketed in Japan, the Republic of Korea, Taiwan, Australia and Spain, and Otsuka Pharmaceutical has obtained sales licenses for at least 10 other countries.
Looking ahead, Tokyo Gas intends to develop diagnostic drug applications using 13CMethane to detect, for example, diabetes and pancreatic disease. By aggressively promoting
13C-Methane in the pharmaceutical raw materials field, Tokyo Gas will develop new value-added businesses for LNG.

Annual Report 2001 TOKYO GAS