OVERSEAS
BUSINESS
Outline and Strength
The Tokyo Gas Group is participating in seven upstream projects
and four midstream and downstream projects with, investing
approximately ¥265 billion (as of March 2016). The upstream
business is to secure new sources of revenue through business
investment, and at the same time enable a higher level of stabilityof Group revenues against fluctuations in raw material prices, andimproving our ability to collect valuable information concerning
raw material procurement. The midstream to downstream
business is where our know-how in the domestic business can beutilized and stable income flows can be expected.
In implementing the Challenge 2020 Vision, we intend to expand
the overseas business and make it become another major
earnings source of the group. Looking ahead, from a perspectiveof efficient allocation of managerial resources, we intend to
more deliberately concentrate on certain areas and businesses.
Specifically, we will focus on participating in direct operation ofLNG and natural gas businesses in North America and Southeast
Asia. Through these operations, we plan to use our Group’s
accumulated experience and know-how, acquire new insights,and expand business.

Accelerating global development
The Tokyo Gas Group has been accelerating its global
business development to add overseas business to ourearnings pillars. Our specific strategy is to develop natural
gas-related business, in which our experience and know-how
in the gas and electric power business in Japan can beutilized. For more efficient use of resources, we will also
concentrate managerial resources in North America andSoutheast Asia where demand for natural gas is increasing
and ample entry opportunities tend to be available.
IchthysDarwinPlutoGorgon

Cordova
Gas Malaysia
Eagle Ford (new)Queensland Curtis

Barnett

North America

Southeast Asia

Australia

Upstream

Operation and management of existing
projects; exploration of new projects-Operation and management of existing
projects

Midstream anddownstreamGas-fired thermal power generation; gasand electricity supply

LNG terminal; gas-fired thermal powergeneration; gas supply; energy service-The Gorgon Project is a joint venture between the Australian subsidiaries of Chevron (47.3%),
ExxonMobil (25%), Shell (25%), Osaka Gas (1.25%), Tokyo Gas (1%) and Chubu Electric Power (0.417%).

TOKYO GAS ANNUAL REPORT 201629

Business outline

Forming an LNG Value Chain
We are focusing on the upstream, gas-fired thermal power
Northgeneration, and gas and electricity supply in North
America America. We envision forming a North America LNG value
chain, in which synergies can be generated among
businesses, such as by stably supplying gas from one of
our upstream projects to our operations in gas-fired
thermal power generation and gas supply.

Upstream BusinessBy monitoring the commodity pricetrends and carefully ascertaining the productivity andreserves of gas fields, we will form appropriate alliances withexperienced operators and invest in prime assets. In addition
to investments in the shale gas development projects in
Cordova, Canada and Barnett, Texas, U.S.A. and we acquired
rights in the Eagle Ford shale gas development project in
Texas in June 2016.
Project Name (Shale gas development)

CanadaCordova

Southeast Asia
Midstream- and Downstream BusinessBy building a
relationship with local governments and through allianceswith local companies, we intend to increase our participationin midstream- and downstream businesses. Particularly inIndonesia, Thailand, and Vietnam, we seek to participate in
LNG terminal, gas-fired thermal power generation, gas
supply, and energy service businesses, leveraging ourGroup’s know-how. Our ultimate target is to form a Southeast
Asia LNG value chain.

Bases in Southeast Asia

Start of Participation Tokyo Gas Interest(Equity Stake)May. 2011

3.75%

U.S.

Barnett

Mar. 2013

25%

U.S.

Eagle Ford

Jun. 2016

25%

When planninggas-fired power generation we will continue to use welldefined criteria to select projects in which to participate,giving due consideration to demand and supply of electricity,
competition with other power sources, regulations andbusiness environment by each regional government.
In gas supply business, we seek to participate in business, inwhich we can leverage our Group’s strength, such as demand
development, in the deregulated market.
Midstream- and Downstream Business

VietnamThailandSingapore

Malaysia

Indonesia

Focus on operation and management of existing projects
Australia
Due to the start-up of the Gorgon
Project in fiscal 2015, four LNG projects that we have invested
in, in Australia, are in operation today, while the Ichthys
Upstream Business

Project is still in preparation. We will continue to focus on
operation and management of those projects.

LNG Production Capacity(Million tons/year)

Start ofParticipation

Tokyo Gas Interest

Start of Production

Darwin

3.0

2003

3.07%

Jan. 2006

Pluto

4.7

2008

5.00%

Apr. 2012

Gorgon

15.6

2009

1.00%

Mar. 2016

Queensland Curtis

8.5

2011

1.25% (Gas field) / 2.50% (No. 2 Liquefaction Plant)

Dec. 2014

Ichthys

8.9

2012

1.575%

2017 (Plan)

Project(Equity Stake)(Operation)

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TOKYO GAS ANNUAL REPORT 2016