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CSR Charter Ⅰ Creating Value for Customers

Safety and Security 1: Procurement Stage

Aspects Determined as 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

Ensuring stable LNG procurement by diversifying sources from which Osaka Gas imports

While reserves of oil are concentrated in the Middle East, natural gas can be exploited around the world. Natural gas's reserve-to-production ratio is also much longer than that of oil*. These factors make natural gas an advantageous source of energy. In 1972, Osaka Gas began importing LNG (liquefied natural gas) from Brunei, and since then we have made efforts to diversify our sources. Today we import LNG from the eight countries of Brunei, Indonesia, Malaysia, Australia, Qatar, Oman, Russia, and Papua New Guinea. We also plan in 2018 to start a natural gas liquefaction project in the US state of Texas, aiming to ensure more stable procurement.

*Source
BP Statistical Review of World Energy June 2017

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 Natural Gas Supply Sources for Osaka Gas

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

Expanding upstream business including obtaining LNG rights

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 Australia, Norway, and Oman. We also participated in the Gorgon LNG Project in Australia in September 2009, the Ichthys LNG Project to produce LNG off the coast of northwest Australia in December 2011, and a shale gas development project in the US in May 2012. In 2013, Osaka Gas joined the project for condensate and gas development in Papua New Guinea.

While fostering the upstream business as a core business to increase profits, we will continue to increase investment in gas field development and LNG projects in order to ensure stable and economical LNG procurement.

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 eight 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.

Conclusion of a contract to sell part of procured LNG to Hiroshima Gas Co.

In July 2014, Osaka Gas concluded a long-term contract to sell LNG to Hiroshima Gas Co., Ltd. Under the 15-year contract from 2016, Osaka Gas delivers 50,000 to 130,000 tons of LNG a year to Hiroshima Gas using our LNG tankers.

Osaka Gas will continue to procure natural gas in a stable manner and at economically feasible prices. In collaboration with the energy business operators of each region, we will work on diffusing environmentally-friendly natural gas and promoting its advanced use.

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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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