Note: The following press release is an English translation of the Japanese-language original

November 27, 2013
Company Name: Japan Petroleum Exploration Co., Ltd. (JAPEX)Securities Code : 1662 Tokyo Stock Exchange, First Section
President: Osamu Watanabe

Inquiries: Shoji Mihara,
General Manager, Media and Investor Relations Department

TEL+81-3-6268-7110:Final Investment Decision on Construction Projectof Soma LNG Receiving Terminal and a Connecting Pipeline
Japan Petroleum Exploration Co., Ltd. (hereafter, “JAPEX”) has made a FinalInvestment Decision (FID) at the meeting of Board of Directors today, to construct anLNG receiving terminal in Shinchi Town, Fukushima Prefecture (Soma Port) as well asa connecting pipeline to convey the vaporized LNG gas at the terminal to JAPEX’s mainpipeline.
Over the years, JAPEX has been supplying natural gas produced domestically inNiigata, Yamagata and Akita prefectures, as well as vaporized LNG gas received fromoverseas, to users in the production areas and to those in other areas through its
pipeline network, which includes the Niigata-Sendai Pipeline and Shiroishi-Koriyama
Pipeline. JAPEX has also been supplying LNG in liquid form to users through LNG
satellite stations utilizing freight cars and tank trucks.
Given rising public awareness of the environment and energy conservation, it isexpected that demand for natural gas to become increasingly strong in the areas
including Tohoku region along the Pacific Ocean including Fukushima, Miyagi andIwate, in addition to the areas along the Sea of Japan. While recognizing that it is its
mission to society to proactively respond to the demand growth in these areas andsupply natural gas at a competitive price stably over a long term, JAPEX has carriedout a front-end engineering design including demand survey for the construction of anew LNG receiving terminal at Soma Port in Fukushima Prefecture, with a connecting
pipeline, since November last year.
The FID that was made today covers the construction of Soma LNG receiving
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terminal that will store and vaporize LNG to be offloaded from large ocean-going LNG
tankers docked at Soma Port, and the construction of a new 40km pipeline to convey
vaporized LNG gas from the terminal to JAPEX’s Niigata-Sendai Pipeline (connecting
at the Uematsu Valve Station in Natori City, Miyagi Prefecture), which is considered
JAPEX’s main artery.
In April this year, JAPEX acquired a 10% interest in a natural gas development andproduction project in British Columbia, Canada, and a 10% interest in the Canada
Pacific NorthWest LNG Project, where natural gas to transport to the Port of Prince
Rupert on the western coast of Canada through pipeline, liquefy and export it as LNG,
including the right to offtake the 10% of LNG. The said projects are operated byPetroliam Nasional Berhad (PETRONAS), a Malaysian state-owned corporation. Theseprojects is to be managed under an integrated framework wherein all partners
undertake the entire process of development, production, liquefaction and offtake at thesame rate of interest, aiming to achieving stable and efficient performance. The project
partners are working toward beginning operation at the liquefaction plant by the end of
2018. Under this project, JAPEX will offtake 10% (1.2 million tons) of LNG at the plant(about 12 million tons per annum) and use it as one of the LNG sources to be received at
Soma LNG receiving terminal, which will be put into operation in March 2018.
On August 2 this year, the plan to construct Soma LNG receiving terminal wasapproved by the Reconstruction Agency as a reconstruction promotion plan under theAct on a post-disaster reconstruction of the Great East Japan Earthquake (ShinchiTown Reconstruction Promotion Plan; Approval No.: Fukushima, No. 23). Through thisconstruction, JAPEX will put further effort into contributing to the post-disasterreconstruction, economic stimulation, and creation of local employment as well as tosecuring stable energy supply in the affected areas.
In the wake of the Great East Japan Earthquake, JAPEX temporarily suspended butsoon resumed the delivery of natural gas to local gas distribution companies in theaffected areas via its Niigata-Sendai Pipeline. By connecting the new natural gas
infrastructure to be constructed along the Pacific Ocean to the Niigata-Sendai pipeline,
JAPEX will be able to supply natural gas both from the Sea of Japan side and thePacific Ocean side, which will dramatically improve supply security in the event of alarge-scale disaster.
With a view to accelerating the process of restoration and reconstruction in the２/５

affected areas, JAPEX will explore the effective use of Soma LNG receiving terminal.
Specifically, JAPEX will consider to take into account, while seeking partnerships withcompanies well-versed in the power generation business, the possibility to participate in
biddings for power generation to be invited by power companies, with the aim ofcontributing to the expansion of the terminal function and the invigoration of localeconomies.
JAPEX will look to further strengthen its natural gas business as one of our coreprofit by employing an integrated operation and supply system (“gas integration”) that
unfailingly supplies consumers with natural gas and LNG produced from gas fields inJapan and abroad through pipelines and LNG import terminals.
As such, in accordance with this FID, JAPEX has reorganized the Soma Project
Division, which was established on November 30 last year.
[Project Overview (front-end engineering design)](Soma LNG receiving terminal)- Construction site: Shinchi Town, Fukushima Prefecture (No. 4 port area in SomaPort), site area: approximately 20ha- Facilities:

One LNG storage tank (230,000kl), Large ocean-going LNG
tankers receiving berth, LNG domestic vessel shipping andreceiving berth, two LNG vaporizers, gas heat capacity control
facilities for vaporized gas, LNG tank truck loading facilities, otherfacilities(Connecting pipeline)- Route and length: From Shinchi Town, Fukushima Prefecture, to Natori City, Miyagi
Prefecture; approximately 40km
- Specification:

Diameter, 20B (20 inches); design pressure, 7 MPa (megapascals)(Facility completion and commencement of operation)- Construction to be completed in:

December 2017

- Service to be commenced in:

March 2018

(Investment amount & Finance)- Total construction costs for Soma LNG receiving terminal and connecting pipeline:
around 60 billion yen
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- Financing: Own funds and bank loans【Planned construction area of Soma LNG receiving terminal（Pier 4, Soma port, Shinchi Town, Fukushima Prefecture）】

Pier 5Pier 4

Pier 3

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Pier 2【Image of Soma LNG receiving terminal (front-end engineering design)】【Supply chain: Canada Pacific NorthWest LNG project～Soma～Niigata】

Niigata

Niigata-Sendaipipeline

North Montney area

Shiroishi-Koriyama
pipeline

CANADA
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