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Osaka Gas Signs Heads of Agreement with Okinawa Electric

May 13. 2010

Osaka Gas entered into an agreement today with Okinawa Electric Power Company on key terms and conditions for sale and purchase of liquefied natural gas.

Under the terms of the heads of agreement (HOA), part of LNG to be purchased by Osaka Gas will be supplied to Okinawa Electric Power for a fuel at its power plant scheduled for launch of commercial operation in 2012.  Transportation of LNG to Okinawa will be made by the vessels to be arranged by Osaka Gas.

Osaka Gas intends to broaden its activities in energy upstream and trading businesses for economical, flexible, and stable procurement of LNG. At the same time, the company will be seeking opportunities to develop greater use of natural gas that has superlative environmental qualities both at home and abroad.

Overview of HOA
(1)Signing parties: Osaka Gas as seller and Okinawa Electric Power as buyer
(2) Contract duration: 27 years commencing in fiscal year 2012
(3)  Contractual volume of LNG: approximately 400,000 tons per annum
(4) Delivery condition: Ex-ship (seller arranges transportation to deliver LNG to buyer’s receiving terminal)
(5) Key LNG source: Gorgon Project (located in North West Australia)

Overview of the Okinawa Electric Power, Co., Inc.
President: Mr. D. Ishimine
Headquarters: Urazoe, Okinawa Prefecture

Overview of Gorgon Project
Location of gas fields: Offshore of North West Australia
Liquefaction plant to be built: Barrow Island
Project ownership: Chevron (Approximately 47%, operator), ExxonMobil (25%), Shell (25%)
Osaka Gas (1.25%), Tokyo Gas (1.0%), Chubu Electric Power (0.417%),
LNG to be produced: Approximately 15 million tons/year

Profile of Osaka Gas
Osaka Gas is one of the largest natural gas suppliers and a major energy services provider in Japan headquartered in Osaka with the customer base of 6.9 million mainly in the Kansai region.  In addition to gas distribution and power generation business in Japan, the company is active in overseas energy markets both in upstream and downstream sectors having its assets in Australia, Oman, Indonesia, U.S., Spain and Norway.  During the year ending March 2010, the company purchased a total of about 6.8 million tons of LNG.

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