Tokyogasgroup csr report

Enhancement of Energy Security

Procurement of LNG

Further Diversification of LNG Procurement

We are committed to further diversifying our procurements of LNG so as to deliver stable and affordable supplies of LNG.
 
Triple diversification
1 Procurement sources
We will broaden our procurement sources from mainly Asia and Australia today to North America and diverse other regions around the world.
2 Contract conditions
We will seek to diversify contract conditions by moving away from mainly oil-linked pricing to indexation against multiple indicators (such as the Henry Hub price) and eliminating destination clauses to allow destination flexibility.
 3 LNG network 
We will seek to acquire gas fields, power stations, etc. on a global basis. By developing an LNG network linking Asia, North America, and Europe, we will also aim to shrink regional disparities  in market prices and create an environment in which supply and demand can be flexibly adjusted.
 
Since Tokyo Gas first began procuring LNG from Alaska in 1969, our imports of LNG have risen steadily to meet growing demand. Tokyo Gas currently imports LNG under long-term contracts with 12 projects in five countries, including Russia (Sakhalin) as well as other countries in the Asia-Pacific region such as Malaysia, Australia, and Brunei.
In March 2016, we entered a new contract to procure an additional 200,000 tons per year (approximately) of LNG from the Cameron LNG project in the U.S. Combined with the approximately 520,000 tons of LNG that we had already committed to buy from the same project under a previous contract and our contract for 1.4 million tons per year from the Cove Point project, also in the U.S., we now have access to several sources of LNG at prices linked to the U.S. natural gas market (Henry Hub) price. We are also strengthening our partnerships with a variety of LNG buyers and other players. Overseas, these include PetroVietnam Gas in Vietnam, Korea Gas Corp., and Centrica LNG in Europe, and, in Japan, utilities such as Kansai Electric Power and Kyushu Electric Power. Diversifying our sources and contract terms and forming partnerships with buyers in Japan and overseas will improve our access to stable, low-priced procurements of LNG.

LNG Project Contract Volume (as of April 2017)
Project name Contract volume
(Unit: 10,000 tons)
Start of operation Period
Brunei 100 1973 20 + 20 + 10 years (until 2023)
Malaysia I (Satu) 260 1983 20 + 15 years (until 2018)
Australia (Western Australia) 53 1989 20 + 8 years (until 2017)
Malaysia II (Dua) 90 1995 20 years (until 2015)
Qatar 35 1998 24 years (until 2021)
Malaysia III (Tiga) 34 2004 20 years (until 2024)
North West Shelf (NWS) Expansion 107 2004 25 years (until 2029)
Darwin (Australia) 100 2006 17 years (until 2022)
Sakhalin II 110 2009 24 years (until 2031)
Pluto (Australia) 150 2012 15 years (until 2025)
Queensland Curtis (Australia) 120 2015 20 years (until 2035)
Gorgon (Australia) 110 2016 25 years (until 2039)
Ichthys (Australia) 105 2017
(planned)
15years
Cove Point (U.S.) 140 2017
(planned)
20years
Cameron (U.S.) Approx. 52
(8 cargoes)
2020 Approx. 20 years
Cameron (U.S.) Approx. 20
(3 cargoes)
2020 Approx. 20 years
DFF Inc., Corporate Social Responsibility Sect, General Administration Dept., Corporate Planning Dept., Resources & Global Business Division, Energy Solution Div, Power Buisiness Dept., Pipeline Network Division, IT Division, Residential Sales Div., Fundamental Technology Dept., Energy Solution Div, Environmental Affairs Dept., Purchasing Dept. , Health Insurance & Employees' Welfare Sect., Personnel Dept., Internal Audit Dept., Audit & Supervisory Board Member's Office, Compliance Dept., Regional Development Div., Finance Dept, TGES, TOKYO GAS COMMUNICATIONS, INC.

Enhancement of LNG Transportation Arrangements

Through our wholly owned subsidiary Tokyo LNG Tanker Co., Ltd., we efficiently manage our own fleet of tankers, which transport LNG under long-term contracts from Malaysia, Australia, and Russia (Sakhalin).
Four LNG tankers are being built to a new and highly economically efficient design capable of transiting the Panama Canal. These will be used to ship LNG mainly from Cove Point in the U.S.

Energy Horizon
Energy Horizon

<Link>

▶ Technically recoverable quantities of conventional and unconventional gas resources

DFF Inc., Corporate Social Responsibility Sect, General Administration Dept., Corporate Planning Dept., Resources & Global Business Division, Energy Solution Div, Power Buisiness Dept., Pipeline Network Division, IT Division, Residential Sales Div., Fundamental Technology Dept., Energy Solution Div, Environmental Affairs Dept., Purchasing Dept. , Health Insurance & Employees' Welfare Sect., Personnel Dept., Internal Audit Dept., Audit & Supervisory Board Member's Office, Compliance Dept., Regional Development Div., Finance Dept, TGES, TOKYO GAS COMMUNICATIONS, INC.