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Introduction

Management
Message

How We Create Value

Compass2030
Vision and Strategy

Invisible
Assets

TCFD

CorporateGovernanceBusiness
Overview

Business overview

BUSINESSOVERVIEWTokyo Gas Integrated Report 2021
52

Financial Data

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Management
Message

Introduction

Compass2030
Vision and Strategy

How We Create Value

Invisible
AssetsCorporate
Governance

TCFD

Business
Overview

Financial Data

City Gas and LNG Sales Business

Strengths

City Gas and LNG
Sales Business

Risks

A customer base of over 11 million customers and a relationship oftrust with customers based on close ties with local communities
A proven track record of providing a safe and reliable supply ofgas to customers
The Kanto region centered around Tokyo, with its high concentrationof production and consumption, as our primary sales area
Safety-related know-how and energy solution technologicalcapabilities

Difficulties in LNG procurement due to geopolitical risks, etc.,
related to raw material imports
Supply troubles caused by damage to production and supply
facilities, stemming from a large-scale disasterIntensified competition driven by market deregulation;
decline in demand caused by changing lifestyles(¥ billion)(¥ billion)

Segment profit (RH)

Net sales (LH)

(million)

Number of retail customers (RH)

18

1,000

80

12850040

64000
2017.32018.32019.32020.32021.3

City gas sales volume

FY2020(billion m3 )Sales volume (LH)

As of March 31, 2021

3120

1,500

8.863 million

12.99 billion m 35

City gas sales volume and numberof retail customers

Net sales and segment profit

Outline By promoting electricity and services, weare seeking to expand the service area of our city
gas business, which has so far been operating in theGreater Tokyo Area, by expanding its application tohousehold, commercial and industrial use as well asuse for power generation and other purposes. By
taking redefining LNG, which is a raw material for citygas, as a commodity, we will also strive to increase
the purchasing flexibility and price competitivenessof LNG and expand our LNG business into assetbacked trading and other operations.

Number of retail customers

12

Equivalent to approximately% of total nationwide gas
sales volume in Japan

Segment profit¥88.4 billion
FY202002017.32018.3

2019.32020.32021.3

Japan relies heavily on LNG imports for procuring natural gas. Most LNG imports are long-term contract based and linked to crude oil prices. With the aim of achieving stable, affordable, andflexible LNG procurement under these conditions, the Tokyo Gas Group is striving to achieve diversification in three areas: supply sources, contract terms and conditions, and the LNG network.
Diversification 1

Diversification 2

Diversification 3

Supply sources

Contract terms and conditions

LNG Network

We are diversifying price indices by adding
contracts based on U.S. natural gas prices andcoal prices in addition to conventional
contracts based on crude oil prices. We arealso making procurement more flexible byadding contracts without restrictions onshipping destinations and those with a morediversified contract period, which may include
medium-term, short-term or spot procurement.

We form strategic alliances with various
companies in Japan and abroad to establish anLNG network that links the Asian, North
American and European markets. In this way,
we aim to improve LNG transport efficiency,
reduce costs, and increase the flexibility ofprocurement and sales contracts.

In 2018, we started to procure LNG from theU.S.A., in addition to supplies procured fromexisting sources, including Southeast Asia,
Australia and Sakhalin. In 2020, the portfolio
agreement with Shell Eastern Trading, underwhich multiple sources supply us with LNG,

came into effect, increasing our supply sources
to 16 projects. In the future, we will work tofurther diversify our procurement sources,
including a Mozambique LNG project whereby
we will jointly purchase LNG with Centrica, in aneffort to improve supply stability.

Main supply sources of Tokyo Gas (long-term contract-based)
Sakhalin ■TokyoTokyo

Cove PointPresent■■■Qatar ■Linked to crude
oil prices
Long-term
contract periods
Restrictions
on shipping
destinations

Cameron■Brunei ブルネイB■■

Malaysia マレーシア■ Mozambique■ New LNG Project

Brunei■■Malaysia
Pluto■

Gorgon■ Existing LNG Project■ Queensland Curtis

Diversificationof price indicesDiversification ofcontract periods
Destination freeclausesTokyo Gas Integrated Report 2021
53

FutureWe mainly trade between
Japan and its export
market countries

Network connecting
Asian, North Americanand European markets

Future■ ■DarwinIchthys
NWS■■

Present

Competitive
procurementof LNG

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Introduction

Management
Message

Compass2030
Vision and Strategy

How We Create Value

Invisible
AssetsCorporateGovernance

TCFD

Business
Overview

Financial Data

Electric Power Business

Strengths

Electric PowerBusiness

Risks

Owning one of the largest high-efficiency power plants
among new power suppliers in the Greater Tokyo Area
A community-based sales network composed of Lifeval,
Enesta and other outlets, and a customer base of more than
11 million customers

Impact on revenue and expenditure of fluctuations in prices
on the wholesale power trading market and raw materials andfuel costs
Damage to power generation facilities and supply troubles
involving raw materials and fuels, stemming from a largescale disaster

Number of retail customers

2.717 million
As of March 31, 2021

Electricity sales volume
Outline We are engaged in a comprehensive
electric power business that extends from fuelprocurement to power generation and sales. As
a new power supplier, we own one of the largest
power plants in the Greater Tokyo Area. In addition
to electricity wholesaling and sales to largevolume consumers, we have been making efforts
to capture retail customers. In the future, with theaim of achieving Net-Zero CO 2 , we will also focus
on acquiring renewable power sources and deliverelectricity tailored to customer needs.

Achievements over the past five
years since the full deregulationof the electric power retail market
In the electric power retail business, we offer a
one-stop service providing gas, electricity andservices. We were supplying electric power to2,717,000 customers as of March 31, 2021 andhold the largest market share for the fifth
consecutive year in the low voltage category
among new power suppliers.

Net sales and segment profit(¥ billion)

Net sales (LH)400

24.76 billion kWh

Electricity sales volume and number of retailcustomers(¥ billion)

Segment profit (RH)

(billion kWh)

Sales volume (LH)

Number of retail customers (RH) 3.00

1230.0

300

922.5

2.25

200

6

15.0

1.50

100

3

7.5

0.75

000

2017.32018.32019.32020.32021.32018.32019.32020.3(photovoltaic, windpower, and biomass)

Natural gas firedpower generation

Domestic

28

Acquisition of renewable energy sources
The Tokyo Gas Group has been working on photovoltaic, onshore wind power, and biomass power
generation, and has made progress in the provision of electricity generated from renewable energy. We
will continue to promote the development and purchase of renewable energy sources in collaboration
with business partners.

Overseas

108

Total

136

Domestic

287

Overseas

123

Total

410

Wind power generation
By making use of our experience in onshore wind power
generation, following the construction of a station on our own sitein 2005, we have participated in Shonai Wind-Power Generation,
which operates the Yuza Wind Power Station in Yamagata
Prefecture. At the same time, we are purchasing power from two
wind power stations operated by Kuroshio Wind Power Generationin Chiba Prefecture. Going forward, we will promote thedevelopment of bottom-mounted offshore wind power generationin Kashima Port, Ibaraki Prefecture, and also work on floating-typeoffshore wind power generation, which is anticipated to grow.

FY2020Recent major development related
to renewable energyApril
2011

Invested in Shonai Wind-Power Generation (30.2% equitystake; 14,560kW output), which operates the Yuza Wind
Power Station, etc.

Feb.
2017

Entered into a capital alliance with Shizen Energy Inc.,
which is engaged in the energy business centering on
photovoltaic power generation.

April
2018

Invested in the Kashima Port Offshore Wind Project being
promoted by Wind Power Energy Co., Ltd.

May
2018

Prominet Power Co., Ltd. (a wholly-owned subsidiary ofTokyo Gas) acquired part of Tokyo Century Corporation’s
stake in its wholly-owned company, SFK Power LLC (39%equity stake; 9,717kW output), jointly with KyudenkoCorporation.

Dec.
2019

Acquired an equity interest in a renewable energy joint
venture company in Mexico which was established byENGIE in France (50% equity stake; 900MW output) .

Overseas renewable energy initiative:
Photovoltaic power generation

May2020

In August 2020, Tokyo Gas America Ltd. acquired the 631MWdc
Aktina Solar Project in Texas, U.S.A. developed by Hecate Energy,a U.S. renewable energy developer. We intend to expand the scaleof overseas renewable energy sources.

Invested in Principle Power, Inc., which develops andpossesses wind float technology for floating-typeoffshore wind power generation.

Aug.
2020

Acquired the 631MWdc Aktina Solar Project in Texas,
U.S.A. developed by Hecate Energy.

Nov.
2020

Invested in Chiba Offshore Wind Inc., established byNorthland Power Inc. and Shizen Energy Inc.

July
2021

Constructed and started commercial solar power
operation of the Iwakuni-Yu Solar Power Plant (23,490kWoutput) in Yamaguchi Prefecture.

Tokyo Gas Integrated Report 202154¥8.6 billion

2021.3

Owned power

Renewable energy

Segment profit

02017.3

Progress in the development ofenergy power sources (as of March 31, 2021)(rounded off to 10,000 kW )FY2020(million)

Back To Contents

Introduction

Management
Message

Compass2030
Vision and Strategy

How We Create Value

Invisible
AssetsCorporateGovernance

TCFD

Business
Overview

Financial Data

Overseas Business

Strengths

Overseas
BusinessRisks

Know-how in the midstream and downstream businesses
accumulated in Japan
Global network established through activities such as raw
material procurement and business participation

Net sales

Stagnation of business operation, increase in expenses, andmissing of business opportunities due to compliance withcountry-specific laws, regulations and/or business practices
Impact of fluctuations in crude oil/gas prices and foreignexchange rates on the revenue and expenditure of overseas
business operations in general¥45.9 billion
FY2020

Segment profit

Net sales and segment profit

Outline Toward realizing the targets set inCompass2030, the Tokyo Gas Group is expanding
its overseas business by engaging mainly inresource development, renewable energy, andLNG infrastructure businesses in North America,
Australia, Southeast Asia, and Europe.

(¥ billion)

Net sales (LH)

60

Segment profit (RH)($/bbl)90204515301015

5002017.3

2018.32019.3¥3.8 billion

Crude oil price and foreign exchange rate(¥ billion)

2020.3

Crude oil price (LH)

Foreign exchange rate (RH)

(¥/$)

60

80

30

4000
2017.32021.3

North America

2018.32019.32020.32021.3

Southeast Asia

Bang BoOne Bangkok

Birdsboro

TG Natural Resources
Barnett
Eagle Ford

Resource Development BusinessWe invest in prime assets by making use of ourknowledge and insights regarding local markets,regulations, and business structures. We haveacquired these through our experience inbusiness operations and the dispatch ofpersonnel. At the same time, We monitor
commodity price trends and carefully estimate
the productivity and reserves of gas fields.

Ichthys

PVGD

PlutoGorgon

Tokyo Gas Indonesia Pte. Ltd.
(Jakarta)(As of March 31, 2021)

Midstream and Downstream Business(As of March 31, 2021)

Midstream and Downstream BusinessIn addition to the natural gas-fired power
generation business, we will also continue tofocus on the renewable energy business.
Following collaboration with the French company
ENGIE in Mexico, we are now working on ourown solar power generation project (Aktina) inthe U.S.A.

We have taken part in the construction of LNG
terminals, power plants, and other energy
infrastructure and facilities. We also provide
support for demand development, LNG terminal
operations, LNG procurement and otheractivities. We thus offer a broad array of value
across the entire value chain.

Tokyo Gas Integrated Report 2021
55

Queensland Curtis

Tokyo Gas Australia Pty Ltd. (Perth)

PRA
Super Energy

Heolios EnTG

Participating Project
Business Location
DarwinTokyo Gas Asia Pte. Ltd.
(Singapore)(and four other bases)

TGES America
Tokyo Gas America Ltd. (Houston)
MT FalconAktina

FGEN LNG

GWHAMTGas Malaysia Bhd.
Gas Malaysia Energy
Advance Sdn. Bhd.

Acario Innovation LLC/
Acario Investment One LLC

BajioAustralia

Midstream- and Downstream
Business
Business Location

Upstream Business
Midstream- and Downstream BusinessBusiness Location

FY2020120(As of March 31, 2021)

Resource Development BusinessWe have invested in five LNG projects inAustralia, which has grown into a major LNG
supply base for East Asia. We will continue tooperate and manage these projects to maximize
the value of our holdings.

Back To Contents

Introduction

ManagementMessage

Compass2030
Vision and StrategyHow We Create Value

Invisible
Assets

TCFD

CorporateGovernanceBusinessOverview

Financial Data

Energy-related Business

Energy-related
Business
Outline Since 1969, when we introduced LNG
for the first time to Japan, we have consistently
handled processes across the entire LNG value
chain. Utilizing the technological capabilities andknow-how developed through these processes,
we provide one-stop solutions, including LNG
terminals, pipelines, district heating and cooling,and energy services, to match the needs ofcustomers both in Japan and overseas.

FY2020

FY2020¥17.0 billion

Net sales and segment profit(¥ billion)

Net sales (LH)

600

Segment profit (RH)(¥ billion)

40450

30300

20150

100
2017.3

During our half-century operations across theentire LNG value chain that extends fromupstream processes to downstream processes,
we have designed and built LNG terminals,
pipelines, district heating and cooling centersand various other facilities and equipment.
Based on the strength of our “user’s knowhow,” which we have cultivated through ourown use, we provide engineering solutions toclients both in Japan and overseas.

Segment profit¥339.4 billion

0Providing engineering solutions
leveraging technologicalcapabilities and know-how
developed over a half centuryNet sales

2018.32019.32020.32021.3

One of the world’s largest district heating/cooling
centers celebrated its 50th anniversary- The Shinjuku District Heating and Cooling Center -The Shinjuku District Heating and Cooling Center, the first of its kind in theGreater Tokyo Area to provide cold/hot heat to a district in 1971, celebrated its
50th anniversary. The Center is one of the world’s largest systems of its kind,serving 22 buildings, mostly hotels and offices with a total floor area of 2.27
million m2, in the Shinjuku area. It also distributes electricity to the Tokyo
Metropolitan Government Buildings. We have evolved technologies to meetthe needs of the times, from measures to combat air pollution to energy
saving, the reduction of CO2 emissions, and the enhancement of resilience.

Tokyo Gas Integrated Report 202156

Thailand: LNG receiving terminal PMC(Project Management Consultation)

We are involved in project management for the construction of the NongFab LNG Terminal commissioned by PTT LNG Co., Ltd., based in Thailand.
We received this order in recognition of the advanced technical capabilities
and the extensive experience accumulated by Tokyo Gas Engineering
Solutions Corporation through the construction and operation of LNG
terminals in Japan and overseas. We are managing the entire project,including technological and contractual aspects, in order to ensure that thedesign, procurement, construction and trial operation performed by theconstruction contractor proceed smoothly as planned.

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Introduction

Management
Message

Compass2030
Vision and Strategy

How We Create Value

Invisible
Assets

TCFD

CorporateGovernanceBusinessOverview

Financial DataUrban Development Service

Urban Development ServiceOffice leasing business(¥ billion)

FY2020¥7.5 billion(¥ billion)

Segment profit (RH)

Net sales (LH)

60

2045

1530

1015

500
2017.32018.32019.32020.32021.3

Gofukubashi (completion

Residential leasing businessscheduled in fiscal 2030)

Ikebukuro (completion

Chiyoda-ku

We are also engaged in the development of urban-type rental housing
complexes “La Tierra Series.” In January 2021, the LaTierra Itabashi of 843
units in 22 apartment buildings was completed. By accelerating acquisition ofproperties, we will enhance the value we offer to our customers through theresidential leasing business and to work towards the betterment of society.

Tokyo Station

Toranomon

Koto-kuChuo-kuToshima-ku

Shimbashi Station
Shiba
Minato-ku
TamachiToyosuToyosu area property development

Meguro-ku
Shinagawa-ku Shinagawa Station

JR Tamachi Station

Pullman Tokyo
Tamachi*1
Tamachi
StationPedestrian deck Tower N

Note: Phase I: Land leasing business, Phase II: Office leasing business(based on capital investment by Tokyo Gas)
Nagisa Terrace

msb Tamachi (musubu Tamachi)

FY2020Net sales and segment profit

scheduled in fiscal 2025)

msb Tamachi (musubu Tamachi)
We are engaged in the business of leasing highvalue-added office space, mainly in city center
areas using large properties. At msb Tamachi, we
have introduced a smart energy network andhave enhanced business continuity planning(BCP), contributing to the creation of anadvanced, appealing community. Phase I ofdevelopment (Tamachi Station Tower S andPullman Tokyo Tamachi) was completed in May
2018, and Phase II (Tamachi Station Tower N)
was completed in July 2020.

Segment profit¥48.4 billion(Real Estate)

Outline Over the course of 136 years in business,
the Tokyo Gas Group has acquired large-scale
and medium-scale areas of land with high assetvalue. We have made full use of the properties
by operating an office and residential real estateleasing business mainly in city center areas withthe basic concept of securing stable revenue andimproving asset value. We are also working on
joint projects with business partners in an effort tomake area-based energy proposals and promoteurban development.

Net sales

Tamachi
StationTower S*2Shibaura
NurserySchoolMinato Park Shibaura

Shibaura ParkAiiku
Hospital

Redevelopment area

msb Tamachi(musubu Tamachi)*1 Hotel*2 Commercial Building

Tokyo Gas Integrated Report 2021
57

The Toyosu area is now
attracting even greaterattention as a waterfront
blessed with greenery,
despite being situatedin a prime location,
approximately 4 km awayfrom Tokyo Station. The
Tokyo Gas Group owns
approximately 18 ha ofland at the Toyosu Wharf
and aims to contributeto the ESG management
and prime, charming
urban development froma long-term perspective.

Toyosu-ohashi Bridge

Harumi-ohashiBridge

Tokyo Gas
Group site

ToyosuMarketToyosuMarketFujimi Bridge
Ariake Tennis noMori Station

Shijoumae
Shintoyosu
StationStation
ToyosuMarketToyosu Smart Energy Center
Ariake NorthBridge

Kiyari Bridge

ToyosuStationYurikamome