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CSR Charter ⅠCreating Value for Customers

Safety and Security 1: Procurement Stage

Aspects Determined as Materiality

  • Customer Health and Safety

Principle and Outline

In recent years, expectations and demand for natural gas have grown from the viewpoint of ensuring energy security. Osaka Gas has been making efforts to ensure the stable procurement of LNG by further diversifying procurement sources. The Company has been also striving to procure LNG with market competiveness by diversifying contract price indicators. When importing LNG from other countries, we are making the transportation process expeditious, safe and steady by operating LNG tankers, including those owned by Osaka Gas, in an efficient manner.

To ensure the stable procurement of natural gas and make our natural gas business profitable, we have been participating in liquefaction projects and gas field development projects.

Stable Procurement

Ensure stable procurement by diversifying sources of LNG imported by Osaka Gas

Unlike oil resources, which are unevenly concentrated in the Middle East, natural gas resources—materials of city gas and fuels for power generation—are spread worldwide. Natural gas's reserve-to-production ratio is also much longer than that for oil,* giving the former a comparative advantage as an energy source. Osaka Gas started importing LNG in 1972 from Brunei, and since then has Ensure stable procurement by diversifying sources of LNG imported by Osaka Gas diversified its procurement sources. At present, we are procuring LNG from eight countries: Indonesia, Malaysia, Australia, Qatar, Oman, Russia and Papua New Guinea, as well as Brunei. We are set to embark on an LNG project in the state of Texas, the United States. We will continue to redouble our efforts to ensure stable LNG procurement.

* Source
BP Statistical Review of World Energy 2018

LNG Imported by Osaka Gas (The amount of LNG for electricity generation and whole sale trade is included.)

LNG Imported by Osaka Gas (The amount of LNG for electricity generation and whole sale trade is included.)

Countries with Natural Gas Reserves and LNG Supply Sources for Osaka Gas

Countries with Natural Gas Reserves and Natural Gas Supply Sources for Osaka Gas

Expanding upstream business including obtaining LNG rightss

Osaka Gas is one of the first Japanese companies to work on the upstream business. In 1990, we took part in a gas field development project in Indonesia, which was later followed by gas and oil development projects in other countries.

As for our future upstream business, we will steadily implement existing projects while taking advantage of our domestic position as a gas and electricity buyer as well as an investor in development projects. In the future, we also aim to obtain concessions in new development projects, focusing on relatively less risky medium-scale projects.

Upstream Businesses of the Daigas Group

(As of Aug. 10, 2018)

Project name Location Project type Concession
ratio
Year of
participation
in the project
Sunrise Australia, East Timor LNG 10% 2000
Evans Shoal Australia LNG 10% 2000
Norwegian Sector of the North Sea
(Idemitsu Snorre Oil Development)
Norway Oil 2~10% 2005
Qalhat LNG Oman LNG 3% 2006
Crux Australia LNG, oil 3% 2007
Gorgon Australia LNG, oil 1.25% 2009
Ichthys Australia LNG, oil 1.2% 2012
Pearsall shale gas oil U.S.A Natural gas, oil 35% 2012
Condensate and gas development in West Papua New Guinea Papua New Guinea Natural gas, oil 10 - 20% 2014
East Texas Shale Gas Project U.S.A Natural gas, condensate,
liquid natural gas
about 30% 2018

LNG project undertaken in northwestern Australia

Gorgon LNG Project

Gorgon LNG Project

Osaka Gas is currently taking part in five gas field development projects off the northwest coast of Australia.

One is the Gorgon LNG Project, where production started in March 2016. Osaka Gas has a 1.25% share in this project. Under this project, Osaka Gas has concluded a contract to purchase about 1.375 million tons of LNG per year.

Another project is the Ichthys LNG Project for which construction started in 2012 and in which Osaka Gas owns a 1.2% concession. Osaka Gas has concluded a contract to purchase about 800,000 tons of LNG per annum for 15 years.

In addition, we have a 10% stake in the Sunrise LNG development project, a 10% share in the Evans Shoal project, and a 3% interest in the Crux project. Efforts are under way for the liquefaction of natural gas at these gas fields.

Expanding fleet of LNG tankers

LNG MARS

“LNG MARS”

Osaka Gas has been striving to secure its LNG transportation capacity using a fleet of six LNG tankers. Demand for LNG transportation is expected to grow following the scheduled starts of new projects, including the Ichthys project in Australia and the Freeport project in the United States.

Under these circumstances, we will effectively utilize our existing fleet and expand it if necessary to ensure stable and economical material procurement and to diffuse the use of natural gas.

Fleet of Osaka Gas LNG Tankers

(As of Aug. 10, 2018)

Tanker When the service
started
Tank capacity Shipyard Tanker management
company
LNG JAMAL Oct. 2000 135,000 m³
(5 Moss-type tanks)
Mitsubishi Heavy Industries, Ltd. NYK Lines
LNG DREAM Oct. 2006 145,000 m³
(4 Moss-type tanks)
Kawasaki Heavy Industries, Ltd. NYK Line
LNG BARKA Dec. 2008 153,000 m³
(4 Moss-type tanks)
Kawasaki Heavy Industries, Ltd. NYK Line
LNG JUPITER July 2009 153,000 m³
(4 Moss-type tanks)
Kawasaki Heavy Industries, Ltd. NYK Line
LNG VENUS Nov. 2014 153,000 m³
(4 Moss-type tanks)
Mitsubishi Heavy Industries, Ltd. Mitsui O.S.K. Lines, Ltd.
LNG MARS Oct. 2016 153,000 m³
(4 Moss-type tanks)
Mitsubishi Heavy Industries, Ltd. Mitsui O.S.K. Lines, Ltd.

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Safety and Security 1: Procurement Stage
Safety and Security 2: Processing Stage
Safety and Security 3: Distribution Stage
Safety and Security 4: Consumption Stage
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