Japan: 100 (Including 54 Secondees) Overseas: 99 (Including 48 Secondees)

Energy Business Group Investor Meeting

December 13, 2012 Mitsubishi Corporation Energy Business Group Contents

1. Overview of Energy Business Group ① Organizational Structure ② Business Performance (Positioning in MC) ③ Value Chain ④ Measures Focused on Future Growth ⑤ Global Expansion of Energy Resources Business ⑥ Equity Share of LNG Production / Equity Share of Oil and Gas Production and Reserves

2. Outline of Business Divisions — Natural Gas Business ① Outlook for LNG Demand by Country/Region ② Diversifying LNG Supply Sources ③ List of Existing LNG Projects ④ Outline of Projects in the Pipeline • Donggi-Senoro LNG Project • Shale Gas Development in Canada/LNG Canada • Browse LNG Project in Australia • Wheatstone LNG Project in Australia • Natural Gas Development in Papua New Guinea • SGU Project in Iraq • Cameron LNG Project

1 Contents

3. Outline of Business Divisions—E&P Business ① Environment Surrounding the E&P Business ② List of Major Projects ③ Overview of Kangean Project in Indonesia

4. Outline of Business Divisions — Petroleum Business ① Organizational Chart for the Petroleum Business Division ② Environment Surrounding the Petroleum Industry ③ Key Initiatives

5. Outline of Business Divisions — Carbon & LPG Business ① Major Products in the Carbon Business ② Key Initiatives in the Carbon Business ③ LPG Business/Astomos Energy ④ LPG Business Value Chain

2 1. Overview of Energy Business Group

3 ① Organizational Structure (As of October 1, 2012) Headcount Organizational Chart Group headcount: 591 Energy Business Group Head Office: 392 Business Division Division Business LPG & Carbon Division A Natural GasBusiness Division Business Petroleum Officer for E&P for Officer President Vice Senior Division B Natural GasBusiness Japan: 100 (including 54 secondees) Overseas: 99 (including 48 secondees)

Business Investees No. of business investees: 94 Energy Business Group CEO Office CEO Group Business Energy Energy Business Group Administration Dept. Administration Group Business Energy Unit Business E&P andAmerica Europe Africa, New Business Development Office Development Business New Asia E&P Business Unit E&PBusiness Asia Japan: 41 E&P New Business E&P NewBusiness Development Unit Utility Feedstock Unit Middle EastNatural Gas Business Unit Industrial Petroleum Marketing Unit Brunei ProjectUnit PetroleumMarketing SupplyUnit & Sakhalin ProjectUnit Shale Gas Business Unit Petroleum Feedstock Unit Global GasUnit Australia Unit Petroleum Coke Unit Donggi-Senoro Project Unit Project Donggi-Senoro Malaysia ProjectUnit Carbon Materials Unit Specialty Carbon & Graphite BusinessUnit Carbon Specialty & New Business Development Unit Development Business New LPG Business Unit Business LPG Indonesia ProjectUnit aiaaTerminalBusiness Unit Namikata Overseas: 53

Overseas sites

No. of Group overseas sites: 28

Asia: 13 (including Oceania) Middle East: 7 North America: 2 Europe: 3 Russia: 1 Central and South America: 2

4 ② Business Performance (Positioning in MC)

(Billion yen) 5,000 500.0 グループGroup 全社Company-wide

4,500450.0

4,000400.0

3,500350.0

3,000250.0

2,500200.0 464.5 452.3 2,000 200.0 371.0 330.0 1,500 150.0 275.8 1,000100.0 120.6 130.0 50.0500 82.8 71.9 94.0 00 Year Ended Year Ended Year Ended Year Ended Year Ending March March 2009 March 2010 March 2011 March 2012 2013 (Forecast)

Oil price (Dubai) $81.8 $69.6 $85.7 $110.1 (Assumption) $108.2 Exchange rate 100.7 yen 92.9 yen 84.2 yen 79.1 yen ( 〃 ) 79.7 yen

Impact of changes in oil price on earnings (net income): for every $1/bbl increase (decrease) in the oil price, net income will increase (decrease) approx. 1.0 billion yen on a full-year basis.

5 ③ Value Chain

Upstream Liquefaction/marketing Trading Transport End users ・ Joint venture with TEPCO ・ Malaysia LNG 3 ・ Brunei LNG ・CELT Inc. ・ BST (Brunei) ・ Malaysia LNG (1 & 2 & 3) ・ MIMI（NWS/Browse）・ IGTC（NWS） Power companies ・ MIMI（NWS/Browse) Natural ・ Sakhalin Energy Investment ・ MI Berau B.V. (Tangguh) ・ Sakhalin Energy Investment ・ Oman LNG gas (LNG) ・ Tomori E&P (Donggi) Gas companies ・ MI Berau B.V. (Tangguh) ・Canada shale gas ・ DSLNG Petroleum ・Papua New Guinea ・ PEW (Wheatstone LNG) ・Wheatstone Petroleum companies ・ LNG Canada/ U.S. LNG Export

Natural Gas Business Divisions Steelmakers ・ MCX ・ MCX USA ・ MCX DUNLIN * Blue text represents business investees ・ MPDC Gabon ・ MEDCO Aluminum ・ Angola Japan Oil ・EMPI E＆P manufacturers

International shipping Trading Marketing / storage Primary distribution / Domestic distribution Petrochemical fleet / terminals refining / trading industry Crude oil ・Southeast Asia ・Diamond Tanker ・ Kanokawa ・Middle East Terminal Automakers ・West Africa ・PDI ・ Onahama ・Australia ・Mitsubishi Shoji Petroleum ・Showa Yokkaichi Petroleum ・PDS Sekiyu General industry Sekiyu ・ products ・PDI MC Energy ・Dia Shoseki Petroleum Business Division Paper and pulp manufacturers Supply of raw materials / Primary Secondary manufacturing / Logistics / trading Logistics Electronics manufacturing and processing processing / carbon products manufacturers ・Coal coke ・Sekiyu Cokes Kogyo ・SG Chemicals Carbon ・Petroleum coke ・MC Carbon ・Joint venture project in China ・MC Carbon Food manufacturers ・Coal tar ・Ryoshin Bulk Trans (MZAS/ Nanjing Baoning Chemical Industries) ・Nihon Electrodes Industry Ceramics industry

Logistics / trading Storage Primary distribution / wholesaling LPG ・ Electrode Namikata Terminal manufacturers ・Astomos Energy ・ Astomos Energy Carbon & LPG Business Division

New Business Development ①Biomass fuel ②Fuel cell / hydrogen usage ③Power generation business ④ On-site power supply (co-generation) ⑤Geothermal business Office

6 ④ Measures Focused on Future Growth

Management A unique and sustainable energy company vision: (All in the name of creating an enriched society through energy)

・Petroleum and gas: Tight supply-demand over the medium and long terms Business → intensified competition for resources environment: ・Nuclear issue → increased demand for natural gas and petroleum ・Shale revolution → expanded use of gas (transport, electricity, petrochemicals)

① Build a structure that generates steady business earnings by achieving balanced growth of resource businesses (natural gas, LNG and E&P) and non-resource businesses (petroleum, carbon and LPG)

② Maintain and expand the Group’s industry presence by expanding Aspirations: natural gas (LNG) business domains, which form the core of the Group’s earnings

③ In non-resource businesses, maintain a strong presence in the Japanese market, while promoting globalization of business centered on Asia and emerging countries.

7 ⑤ Global Expansion of Energy Resources Business

U.K. North Sea Development/ Canada Shale Gas Production Development Projects (Crude oil)

Sakhalin II LNG U.S. Gulf of Mexico Development/ Production Iraq SGU (Crude oil)

Oman LNG Liberia Exploration (Crude oil) Gabon Exploration/ Development/ Production Malaysia LNG (Crude oil)) Venezuela Brunei LNG Development of Orinoco heavy oil Browse LNG Donggi-Senoro LNG (Crude oil) Angola North West Shelf LNG Tangguh LNG Development/ Kimberly Production Wheatstone LNG Exploration (Crude oil) (Crude oil/ Investment in Natural gas) MEDCO Papua New Guinea Kangean Exploration/ Development/ Development Production (Natural gas) (Crude oil/ Natural gas)

8 ⑥ Equity Share of LNG Production / Equity Share of Oil and Gas Production and Reserves

(Million tons/year) Equity ShareLNG持分生産能力 of LNG Production 12.001200 タングー*Tangguh* サハリンⅡ* 10.001000 Sakhalin II* Target: カルハットQalhat (Oman) 8.00800 7.05 7.05 7.05 7.05 （オマーン） 10 million tons オマーンOman 6.00600 4.97 4.97 5.34 西オーストラリア*Western Australia* マレーシア3*Malaysia III* 4.00400 マレーシア2Malaysia II

2.00200 マレーシア1Malaysia I

ブルネイBrunei 00 20062006年 20072007年 20082008年 20092009年 2010年 20112011年 20122012年 20132013年 20202020年

* Owns upstream working interest Equity Share of Oil and Gas Production (Yearly Average)*1 (Thousand BBL/Day) Crude il/condensate ■ 天然ガスNatural gas原油・コンデンセート■ Crude oil/condensate 0.22 Billion BBL

160 146 141 140 116 47 39 120 Natural gas 84 90 82 76 84 0.91 Billion BBL 100 90 84 49 6376 80 48 42 40 60 99 102 40 67 42 20 36 41 0 2006 2007 2008 2009 2010 2011MC’s Reserves 2012 Total *1*2 1.13 Billion BBL *1 Oil equivalent. Includes consolidated subsidiaries and equity-method affiliates (est.) *2 Participating interest equivalent. Includes reserves based on original standards set by MC (As of December 31, 2011) 9 2. Outline of Business Divisions — Natural Gas Business

10 ①Outlook for LNG Demand by Country/Region

LNG demand is projected to increase approximately 1.5-fold to 370 million tons in 2020, from 240 million tons in 2011.

(million tons/year) 2010 2011 2012 2015 2020 Actual Actual Est. Est. VS 2011 Est. VS 2011 Asia-pacific region 135 154 171 187 32 238 83 Japan 70 79 86 80 2 93 15 Korea 33 37 36 37 0 37 0 Taiwan 11 12 13 15 3 20 8 China 912162613 45 33 India 9111613 2 20 9 Other Asia 0111110 16 16 Chile, Mexico (Pacific Coast) 33363 6 3 Atlantic region 75 87 76 99 12 130 43 Europe 56 66 52 73 7 106 40 North America (Excl. Pacific Coast) 13 13 9 7 (6) 8 (5) Others (Middle East, Central & South America) 69151910 16 8 Worldwide total 210 241 247 285 44 368 127

11 ②Diversifying LNG Supply Sources • LNG exporting regions, which are currently centered on Asia and Oceania, will expand to North America, Africa and other regions. (There were 20 supplying nations in 2011.)

East Siberia West Siberia West Canada

Europe ｻﾊﾘﾝSakhalin

U.S.

Qatar China

East Africa

East Australia (CBM)

Brazil Existing supply regions New supply regions

LNG importing regions

12 ③List of Existing LNG Projects Start Project MC’s Role Shareholding

1969 Alaska LNG Sales to Tokyo Electric and Tokyo Gas; Negotiation support; Import agent －＊First introduction of LNG to East Asia

1972 Brunei LNG Investment in liquefaction and sales; Negotiation support; Import agent; Shipping 25%

1983 Malaysia LNG Investment in liquefaction and sales; Negotiation support; Import agent 5-15% * 3 Projects: Satu, Dua (FID 1992) and Tiga (FID 1999)

1989 North Wes Investment in upstream, in liquefaction and in sales; Negotiation support; 8.3% Shelf LNG Import agent; Shipping (Includes crude ＊First joint venture with Mitsui & Co., Ltd. oil development)

2000 Oman LNG Investment in liquefaction and sales 2.8%

2004 Qalhat LNG Investment in liquefaction and sales; Import agent; Shipping 4% (Oman）＊ Global sales and arbitrage operations

2009 Sakhalin LNG Investment in upstream, in liquefaction and in sales; Negotiation support; Import 10% (Includes crude agent oil development) ＊Joint venture with Mitsui & Co., Ltd. (LNG FID 2003)

2009 Tangguh LNG Investment in upstream, in liquefaction and in sales; Negotiation support ＊Joint Approx. 9.9% (Indonesia) venture with INPEX Corporation (FID 2005) 2010 Shale Gas Investment in upstream, and in development. Joint development with Japanese 30-40% (Canada) utility and gas companies ＊North American natural gas business 2014 Donggi- Investment in upstream, in liquefaction and in sales - together with KOGAS (FID Approx. 45% (Plan) Senoro LNG 2011) (Indonesia) ＊Taking on operatorship of LNG plant

13 ④Project Pipeline: Donggi-Senoro LNG Project

MC’s first-ever LNG project that it leads through to establishment of the plant The Donggi-Senoro LNG Project has been started in Indonesia to produce and sell liquefied natural gas (LNG). MC is the largest shareholder in this project, which is the first to be led by MC from planning through to plant operation. From 2014, the project plans to produce approximately 2 million tons of LNG per year. Location of plant Through this project, MC will build on the LNG business know-how and functions construction it has cultivated over many years since its first operation in Alaska in 1969 to Suburban Luwuk, Banggai ensure an even more stable supply to Japan and the East Asia region. Regency, Central Sulawesi Province With shareholders coming from Japan, Indonesia and South Korea, this is the first all-Asian LNG project.

14 ④Project Pipeline: Shale Gas Development in Canada/LNG Canada

Cordova region Montney region

Period of Entry September 2010 February 2012

540 km2 in Cordova 1,667 km2 in Montney Exploration Embayment, northeastern Cutbank and Dawson, British Zone British Columbia Columbia 35 trillion cubic feet (720 5-8 trillion cubic feet (100- million tons) Equivalent to 9 Reserves 160 million tons) years’ worth of Japan’s gas consumption MC’s share 30% 40% Penn West Encana Operator （50%）（60%）

Peak Approx. 0.7 billion cubic Approx. 3.0 billion cubic production feet/day (approx. 5 million feet/day (approx. 5 million output tons/year, 2018) tons/year, 2018)

Production Over 50 years Over 50 years Promoting LNG development (LNG Canada) through a Period partnership represented by Shell (40%), along with ･Partnered with Encana, ･ Japan, China and Korea (20% each) Chubu Electric, Tokyo Gas, Canada’s largest natural gas Osaka Gas, JOGMEC producer (3.75% each), and KOGAS ･ (5%) are also participating As one of Canada’s largest Cordova as partners. shale gas assets, this prime project offers outstanding Features ･ Half (50%) of the gas productivity and cost Montney produced will be sold in competitiveness. North America through ･ CIMA Energy, a US gas Immense contribution to marketing company in Canada’s economic growth which MC has a 34% share. (project will create 14,000 new jobs)

15 ④Project Pipeline: Browse LNG Project in Australia

Japan Australia LNG (MIMI) Pty. Ltd. is a 50-50 joint venture between Mitsubishi Corporation and Mitsui & Gas and Condensate Co., Ltd. In September 2012, its subsidiary officially Fields participated in the Browse LNG Project promoted by Woodside Petroleum Ltd.

FID is planned for the first half of 2013.

Project Partners Woodside Browse, BHP Billiton Petroleum (North West Shelf) Pty Ltd., BP Developments Australia Pty Ltd., Chevron Australia Pty Ltd., Shell Development(Australia)Proprietary LNG plant Limited, Japan Australia LNG (MIMI Browse) Pty Ltd Location of Gas and Browse Basin, 425km off Broome in Western Australia Condensate Fields Proposed LNG Plant Location James Price Point in Kimberley, Western Australia LNG Production 12 million tons per annum (4 million tons ×3 trains) * Potential expansion to 25 million tons per annum Reserve (estimated by Gas: 15.5 trillion cubic feet Woodside Energy) Condensate: 417 million barrels FID Planned first half 2013

16 ④Project Pipeline: Wheatstone LNG Project in Australia

17 ④Project Pipeline: Natural Gas Development in Papua New Guinea

Exploration, appraisal and development of Outline natural gas in Papua New Guinea

Nine onshore licenses in Papua New Licenses Guinea’s Western Province

Licensed Talisman, MC and others’ licensed equity Equity positions will average 40%, 20% and 40%, Positions respectively in these nine licenses.

Approx. 3 million tons (period undetermined, LNG pending confirmation of gas reserves) Production * Equity interests in the LNG project have yet to be determined.

By harnessing the complementary strengths of MC’s LNG project development and execution capabilities and Canada-based Talisman’s natural gas exploration, development and production capabilities, MC is considering developing LNG from natural gas produced in Papua New Guinea.

18 ④Project Pipeline: SGU Project in Iraq

Project to effectively utilize associated gas (currently most of such gas is flared), which is essential to Iraq’s economic recovery.

In the future, the project expects to export LNG (FID: from 2015 / 4 million tons a year)

Collect and refine associated gas from three oil Syria Outline fields in Basrah Province, and supply products Iran domestically in Iraq and for export. Operating Basrah Gas Company (South Gas Company 51%, Baghdad company Shell 41%, MC 5%) Handling 2 billion standard cubic feet/day (16 million volume tons/year) Basrah province Start of 2013 operations Basrah After sufficient domestic gas supplies are achieved, Saudi Arabia LNG make a FID on LNG as soon as feedstock gas is available.

19 ④Project Pipeline: Cameron LNG Project

Cameron, Louisiana Project operator Sempra LNG FID 2013 4Q Start of operations 2017 2Q

Liquefaction × capacity 4.0MTPA 3Train Tolling Service (The three companies GDFS, Mitsui & Co., and MC are Marketing currently conducting negotiations as tollers.) Existing facilities 3Tanks、2Berths

Feed and EPC FEED: Foster Wheeler, Contractors EPC: tender planned 【Tolling business scheme】 Cameron LNG JV LNG purchasers Tolling agreement SPAs U.S. gas producers Gas supply agreement Mitsubishi Corporation ⇒Against the backdrop of the shale gas revolution, MC seeks to achieve LNG exports from Spot purchase the U.S., which has abundant Pipeline agreement U.S. gas market gas reserves, and sell part of Cameron Interstate this gas to Japan. Pipeline companies Pipeline

20 3. Outline of Business Divisions— E&P Business

21 ① Environment Surrounding the E&P Business Persistently high oil prices and continued firm Expectations for unconventional resources, demand for crude oil and the opening of new frontiers ・In North America, development of unconventional resources has heated ・According to World Energy Outlook 2012, the IEA average crude oil up. Recently, there have been high hopes for shale oil in response to import price is expected to increase to $125 by 2035. sluggish natural gas prices. ・Despite high oil prices, crude oil demand is projected to continue to ・Tackling the challenge of technically difficult regions, such as great expand, mainly in Asian emerging countries such as China and India. sea depths and the Arctic Ocean. Trend and outlook for global crude oil demand and crude oil Trend and outlook for U.S. crude oil and natural gas prices through 2035 production through 2035

Source: World Energy Outlook 2012 Source: World Energy Outlook 2012 Note: Crude oil prices represent IEA average crude oil import prices. Energy policies are attracting attention • The importance of fossil fuels, such as oil and natural gas, is being reaffirmed following the nuclear accident in Japan. In this context, the energy policies of various countries are attracting attention.

MC’s Initiatives in the E&P Business

Obtain and provide stable Promote a growth strategy focused on the value chains (upstream) of the LNG and petroleum businesses supplies of resources Contribute to earnings over the medium and long terms

22 ②List of Major Projects

Equity interest Crude Project Partners Status (MC, net) oil/gas

Gabon (Baudroie Marine field, 50.00～ Exploration/development Merou Sardine field, Nguma field Total/Perenco Crude oil 100.00% /production and others)

Angola 10.20% Sonangol/ENI/ and others Development/production Crude oil (Block 3/05, 3/05-A)

Anadarko/Eni/ConocoPhillips/ U.S. Gulf of Mexico (K2 project) 11.60% Development/production Crude oil NOEX/Ecopetrol

U.K. North Sea Dunlin Oil Field 30.00% Fairfield Energy Development/production Crude oil

Kangean, Indonesia 25.00% JAPEX/EMP Development/production Gas/crude oil

PT. Medco Energi Internasional 19.97% Encore International Listed company - Tbk.of Indonesia

Liberia (Block 10) 10.00% Anadarko/Repsol Exploration Crude oil

23 ③Overview of Kangean Project in Indonesia

Overview ・In May 2007, MC and Japan Petroleum Exploration Co., Ltd. (JAPEX) participated in the Kangean PSC by acquiring a combined 50% working interest. ・Through their management of Kangean Energy Indonesia Ltd., MC and JAPEX are promoting this project as the de facto project operators. ・Production started in Terang gas field, the core project in Kangean, in late May 2012. (A gas volume of 300 Million Standard Cubic Feet per Day at the peak period is planned to be produced and distributed across East Java Province.) ・MC plans to develop the Sirasun and Batur gas fields going forward. MC is also conducting feasibility studies of the potential for additional exploration and development within the Kangean PSC.

Structure of Partnership

24 4. Outline of Business Divisions — Petroleum Business

25 ①Organizational Chart for the Petroleum Business Division (November 2012)

Petroleum Business Strategy ◇Planning and development of business division strategies, personnel and general affairs, environmental management E&P Petroleum Supply & Marketing Unit ◇Import, export and offshore trading of crude oil and Energy Business petroleum products Group Petroleum Business ◇Management of petroleum refining and sales businesses ◇Responsible for business investees (PDI, PDS, Div. Showa Yokkaichi Sekiyu, Mitsubishi Shoji Sekiyu Group, Dia Shoseki Group)

Group CEO Office

Upstream Natural Gas Business Industrial Petroleum Marketing Unit Business Office Div. A ◇Import and sales of heavy oil, lubricant oil and asphalt to industrial firms ◇Responsible for business investees (MC Energy) New Business Development Office Natural Gas Business Energy Business Group Div. B Administration Dept. Utility Feedstock Unit ◇Trading in crude oil, heavy oil and ships for electric utilities Carbon & LPG ◇Responsible for business investees (Onahama Petroleum, Business Div. Kanokawa Terminal, Diamond Tanker) Key Business Investments

-Showa Yokkaichi Sekiyu -Mitsubishi Shoji Sekiyu -Petro Diamond Incorporated （PDI） -Dia Shoseki Petroleum Feedstock Unit -Petro Diamond Singapore （PDS） -MC Energy ◇ Import and offshore trading of naphtha, condensate -Onahama Petroleum and gasoline components, and ship freight transactions -Diamond Tanker ◇ Responsible for business investees (Central Tanker)

26 ② Environment Surrounding the Petroleum Industry

【 Japan 】【 Overseas 】 ◆ Gradual decrease in petroleum demand due mainly to Japan’s declining ◆ Gradual decrease in petroleum demand in OECD countries due population and environmental measures. mainly to declining populations and environmental measures ◆ Reduction in refining capacity in line with the Act on Sophisticated Energy ◆ Sharp increase in petroleum demand in emerging countries in step Supply Structures. with vigorous economic growth. ◆ Clear demarcation of winners and losers among refineries, distributors ◆ Changes in commercial flows of petroleum triggered by the Shale and sellers and further industry realignment. Revolution ◆ Unpredictable energy mix (restart of nuclear power plants) and uncertain ◆ Consistently high crude oil prices petroleum demand from electric utilities

27 ③ Key Initiatives

【 Japan 】 Relentlessly strive to maintain and increase share of the domestic market by maintaining and strengthening MC’s outstanding sales network and leveraging its competitive supply capabilities and capacity to adjust for changes in supply and demand.

【 Overseas 】 Expand new business by capturing growth in buoyant demand for petroleum products in the Asia-Pacific region, which is undergoing rapid economic growth.

【 Electric power 】 Provide stable supplies to meet increased petroleum demand from electric utilities amid suspended operation of nuclear power plants, and revise MC’s petroleum supply structure in anticipation of future demand.

28 5. Outline of Business Divisions — Carbon & LPG Business

29 ① Major Products in the Carbon Business The carbon business develops non-resource businesses involving raw materials and supplies essential to industry, leveraging Company-wide resource businesses. Petroleum Coke Unit ① Protect and expand existing business interests) ② Strengthen value chains by securing new sources of petroleum coke ③ Enhance existing businesses by securing new inventory sites and promoting fuel conversion

Speciality Carbon BU Promote the manufacturing, development and commercialization of anode materials for lithium-ion batteries

Aluminium-Related Carbon Materials Office ① Promote the manufacturing and sales of anodes for aluminum smelting in China ② Promote the manufacturing and sales of pitch coke for China ③ Expand business utilizing a BF carbon block cathode manufacturer ④ Establish a One-Stop Service for every carbon product for aluminium smelting.

Carbon Materials BU ① Expand existing businesses and develop new businesses in such fields as graphite electrodes, carbon black feedstock oil, needle pitch coke, etc. ② Promote the needle pitch coke manufacturing and sales business in Korea

30 ②Key Initiatives

Capture earnings in growing markets Key Division Initiative I

Projected Demand for Aluminum (million tons)

 Demand for aluminum is projected to continue growing steadily over the 70

medium and long terms. (Year ended March 2012: 43 million tons → year 60

ending March 2021: 68 million tons) 50  The Division is working with the aim of capturing growth in the aluminum 40 market as a One Stop Servicer for aluminum smelters. 30  The Division is working to strengthen its presence in the aluminum 20 industry in collaboration with manufacturers of carbon materials for 10 aluminum smelters worldwide. To this end, measures also include 0 overseas business investments. 05 06 07 08 09 10 11 e12 e13 e14 e15 e16 e17 e18 e19 e20

Key Division Initiative II Major fine carbon products

 The Division offers cutting-edge fine carbon materials, such as lithium-ion Anode Crucible for Carbon brush for Graphite materials materials for manufacturing wind power for high- battery anode materials and crucibles for manufacturing silicon for solar lithium-ion silicon for solar generation temperature gas batteries cells furnaces cells.  The market for lithium-ion battery anode materials is expected to experience significant expansion. (Year ended March 2012: approx. 60 billion yen → year ending March 2021: more than 500 billion yen)  Having established a development and manufacturing company for anode materials, the Division is working to commercialize the manufacturing and sale of these materials, from the supply of raw materials to high- temperature thermal treatment and other operations.

31 ③LPG Business/Astomos Energy Astomos Energy’s bases (Branches and terminals) Established an LPG operating company with one of the [Branches] [Supply structure] Domestic: 10 locations (Major cities) Import terminals: 10 locations) world’s largest trading volumes and Japan’s largest Overseas: 2 locations Secondary terminals: 6 locations share through a business integration in 2006.

Mitsubishi Liquefied Gas Co.

* National LPG storage terminal based on a subterranean rock storage system Namikata Terminal a wholly owned Features of Astomos Energy subsidiary of MC, is scheduled to operate the Integrate and capture synergies between overseas operations (trading facility (storage of LPG, chemicals and functions) and domestic operations (primary distribution functions) petroleum) under contract. * 450,000 tons of LPG will be stored in a subterranean Outline of Astomos Energy rock storage system 180m below the surface. Established: April 1, 2006 Business activities: Import and sales of liquified petroleum gas (LPG), overseas LPG trading (Ship ownership) Shareholders: Idemitsu Kosan Co., Ltd. 51%, Mitsubishi Corporation 49% Number of Employees: 347 (as of April 2012) Sales: 643.9 billion yen (year ended March 2012) Trading volume: Approx. 3.7 million tons in Japan; total global trading volume of 9.4 million tons (one of the world’s largest) Overview of Liquefied Petroleum Gas (LPG)

 LPG is a gaseous fuel consisting primarily of propane and butane.  LPG is utilized by around 50% (approx. 25 million households) of all Japanese households as a fuel for residential and commercial use. LNG is used extensively across roughly 95% of Japan’s land area.  LPG is an environmentally friendly, distributed form of energy (used to address the Great East Japan Earthquake).

32 ④LPG Business Value Chain

 By building an integrated value chain spanning LPG procurement to transport  Demand for associated LPG is projected to increase and receiving terminal operations, along with wholesaling and retailing in substantially in step with increased LNG production in the Japan, Astomos Energy is developing a stable business model as a non- Middle East and shale gas development in North America. resource business. Astomos Energy has the advantage of a robust fleet of ships.  Astomos Energy is helping to ensure crucial aspects of energy security for Leveraging this strength, the company aims to drive expansion Japan. These include stable procurement and transport of LPG leveraging one in overseas commercial flows of associated LP gas. of the world’s largest fleets of ships, and fuel procurement and supply through  Backed by its dominant procurement capabilities, Astomos the operation of LPG receiving and transport terminals in Japan. Energy will strive to strengthen its wholesaling and retailing  Astomos Energy is developing business in fields close to consumers through capabilities in Japan, with the view to rapidly addressing major retail sales and related businesses (Enefarm, etc.). The company also earthquakes and other emergencies by leveraging the features supplies LPG to electric utilities (for power generation) and gas companies (for of LPG. Looking ahead, the company will continue working to heating). In these ways, the company plays a role in providing crucial social upgrade its functions. infrastructure.

33 Shale Gas Business

Source: theengineer.co.uk Impacts from the “Shale Gas Revolution”

Enormous Reserves

Proven Natural Gas Technically Recoverable Reserves Shale Gas Resources

6,609 tcf + 6,622 tcf ＝ 13,231 tcf

Reserves-to-production ratio: 63 years

Reserves-to-production ratio: 127 years Exploration and appraisal suggest resource base will expand going forward

(Source: US Energy Information Administration April 2011 “World Shale Gas Resources”)

2 Conventional Natural Gas Reserves Shale Gas/Silt Gas *Japan’s entire import volume consists of LNG sourced from conventional natural gas.

Diffusion into Diffusion into the air the air

Natural flow under internal ③ The cap rock acts 2,000～3,000m gas field as a lid, trapping pressure the gas.

① Due to low ② Hydraulic Conventional ② Due to the low- permeability, gas fracturing natural gas permeability of the cannot be recovered (fracking) of the rock, the gas moves by vertical drilling rock enables ガス移動 through fissures alone. Horizontal extraction of the drilling is also gas from the Cap rock Shale required. resulting fissures.

シール Reservoir rock Source rock 30～100m ① Over many years the gas rises (most Source rock of it diffuses in the air from the ground surface) 1,000~2,000m

Silt and shale, etc. Gas formation and storage has completed in these Mudstone and limestone, Sandstone, etc. This Mudstone and shale, etc. rocks, but the gas remains dormant in them due to their low etc. Cap rock has very low rock is highly Source rock contains permeability. permeability, preventing permeable, allowing the organic compounds that upward migration of the gas. gas to move through it. form the gas.  Seismic exploration and test wells provide sufficient data to ascertain the position, depth, and amount of oil and gas reserves, so there is no exploration risk. The main determining factor is how much can be recovered economically (similar to coal extraction).  The key point is whether a gas field can be discovered or not  Due to the low recovery rate from a single well and severe attenuation in (exploration projects). productivity, multiple wells must be drilled continually (by the same token, the pace of excavation can be adjusted in line with demand, similar to the manufacturing business).

3 The “Shale Gas Revolution”

•Transforming the Energy Situation in the US (and the World) The US is transforming itself from net importer of LNG to a net exporter (planned) (LNG receiving terminals for over 150 million tons now operate at around 10% capacity). This is one factor behind easing of global demand for natural gas, which enabled Japan to step up procurement following the March 2011 disaster. (LNG project built to meet projected US demand now had extra capacity to sell). Projection for US Natural Gas Supply Sources

 The supply-demand gap that was previously to be filled by LNG is now filled by gas from unconventional resources.  Unconventional resource gas currently supplies around 50% of demand, projected to increase to 75% by 2035. Shale gas plays a major role in this.  US projected to be virtually self-sufficient by 2035.

Trillion 2009 cubic feet Unconventional: 75% Unconventional: 50% 30 1% Imported LNG (510 million25 tons) 11% Shale gas 46% (410 million20 tons) 14% 20% 15 Onshore conventional gas 8% 9% Offshore conventional gas 8% 10 28% Tight sand gas 22% 5 8% Coalbed methane 7% Gas associated with oil Alaska 1% 0 2% 9% 7% 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 Source: US Energy Information Administration Energy Outlook 2011

4 Canada LNG Export Scheme

Develop new reliable supply sources that can provide stable supply over the long term

(1) Stable government administration and relationship between Japan and Canada; federal, provincial and territorial governments strongly support LNG exports (2) Located relatively close to Japan (about 10 days from western Canada) ⇔ (about 40 days from the US Gulf of Mexico; reduced to 26 days after Panama Canal expansion completed) (3) Enormous reserves but low domestic demand (population: 34 million ⇔ 300 million in the US)

5 Canada LNG Export Scheme ”Private & Confidential”

Several green field projects for Canada’s western seaboard are currently being examined, including new construction of LNG bases and pipelines.

Source:Kitmat LNG(2012)

6 MC’s Shale Gas Business

Cordova Region Montney Region Participation date September 2010 February 2012

Cordova Embayment, northeast British Columbia, Montney Cutbank and Dawson, British Columbia, Exploration zone Canada, 540 km2 Canada, 1,667 km2

Recoverable shale 35 trillion cubic feet (720 million tons, equivalent to 5-8 trillion cubic feet (100 to 160 million tons) gas resources approx. 9 years of annual consumption in Japan)

MC’s share 30% 40%

Acquisition cost C$450 million (approx. \36 billion) C$2,900 million (approx. \229 billion)

Operators Penn West Exploration(50%) Encana Corporation(60%) Peak production Approx. 700 million cubic feet per day Approx. 3,000 million cubic feet per day volume Production period Over 50 years Over 50 years \ Operation cost Approx. C$2,200 million (Approx.\180 billion) Approx. C$6,000 million (Approx. 480 billion) *MC's share *Project 100% baisis ･Chubu Electric, Tokyo Gas, Osaka Gas, ･Partnered with Encana, Canada’s largest natural JOGMEC (3.75% each), and KOGAS (5%) are gas producer also participating as partners. ･As one of Canada’s largest shale gas assets, this ･Half (50%) of the gas produced will be sold in prime project offers outstanding productivity and Features North America through CIMA Energy, a US gas cost competitiveness. marketing company in which MC has a 34% share. ･Immense contribution to Canada’s economic growth (project will create 14,000 new jobs)

7 LNG Exports from Canada: LNG Canada Project

Shell, KOGAS, CNPC and MC will transport feedstock gas from their respective shale gas assets in Canada’s British Columbia and Alberta provinces via a pipeline. The gas is to be liquefied at a plant on the west coast (Port of Kitimat, British Columbia) and LNG exports planned to commence from 2019.

Shale gas assets

Gas liquefaction plant (Port of Kitimat) - 6 million tons per year x 2 trains - Consider to expand 2 additional trains Partners Pipelines (approx. 700 km) Shell, KOGAS, CNPC, MC Contracted building and operation of large diameter pipeline =40%, 20%, 20%, 20% to TransCanada, a major pipeline company in Canada Schedule - Aim to make final investment decision by 2015 - Plan to start production by 2019