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Efforts of Hokkaido Gas Co., Ltd. to Increase the Share of Natural Gas

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Efforts of Hokkaido Gas Co., Ltd. to Increase the Share of Natural Gas EEffffoorrttss ooff HHokokkakaiiddoo GGaass CCoo.,., LLttdd.. ttoo IInnccrreeaassee tthhee SShhaarree ooff NNaattuurraall GGaass UUssaagege JJuullyy ９９,, 20092009 HHookkaikkaidodo GGasas CCoo.,., Ltd.Ltd. 1 1. Characteristics of Hokkaido 1-1. Geographical and climatic characteristics of Hokkaido ■Situated in the northernmost part of Japan ⇒ lat. 41 to 45 degrees north ■Area: 83,000 m2 (approx. 22% of the total area of Japan) ■Population: 5.57 million (approx. 4.4% of the total population of Japan) ■Coldest region in Japan; the entire prefecture is a heavy snow area ⇒ Sapporo: Mean temperature: 8.5ºC; mean snowfall: 625 cm Changes in temperature and precipitation (Sapporo) Mean Precipitation temp. Jan. Feb. Mar. Apr. May June July Aug, Sept. Oct. Nov.Dec. 2 1. Characteristics of Hokkaido 1-2. Energy supply/demand conditions in Hokkaido ■High ratio of crude oil/petroleum products ⇒ 63.0% (48.1% nationwide) ■Low ratio of natural and city gas ⇒ 1.6% (13.9% nationwide) Breakdown of total supply from primary energy (2004) 0.7 Crude oil/petroleum products Coal/coal products Natural gas Nuclear power Japan 48.1 21.4 City gas 10.5 3.5 (610.8 million kl） 13.9 1.9 High dependence on petrol Low ratio of natural gas (target oil dependence under the 1.6 New National Energy Strategy: 40%) 1.9 Hokkaido 63.0 20.6 7.0 3.8 (28.45 million kl) 2.2 0% 20% 40% 60% 80% 100% Crude oil/petroleum products Coal/coal products Natural gas/city gas Nuclear power Renewable/unused energy Black liquor Hydraulic power 3 Source: Energy Supply/Demand Conditions in Hokkaido (Hokkaido Government) 1. Characteristics of Hokkaido CO2 emissions in Hokkaido 1.3 times the national average Hokkaido Japan Increase from FY Increase from FY FY 2003 1990 FY 2003 1990 Total CO2 emissions (10,000 tC) ２，０４７ １６．９％ ３４，３３６ １２．２％ Per capita emission (tC/person) ３．６２ １６．８％ ２．６９ ＋８．７％ ■ Breakdown of CO2 emissions by sector (FY 2003) C民生ivilian (（re家庭）sidential) C民生ivilian （(b業務）usiness) Tr運輸ansport Industry Other Japan 産業 その他 全国 13.5 15.6 20.7 37.8 12.5 High ratio of the residential sector C民生ivilian (（re家庭）sidential) 民生Civilian（ (業務）business) Tr運輸ansport Ind産業ustry そOの他ther 北海道Hokkai 20.5 12.7 20.9 37.1 8.7 do 0% 20% 40% 60% 80% 100% ・ ・Significantly higher CO2 emissions than the rest of Japan due to high dependence on petrol and coal ・ Significantly higher CO2 emissions than the rest of Japan due to high dependence on petrol and coal ・TThhee l evelevel lof of efforts efforts to to re redduuccee e ennvvirioronnmmenentatal lb buurdrdeensns (c (coompamparedred w witihth t hethe ba bassee yea year)r) t etenndsds to to be be lower than in the rest of Japan) lower than in the rest of Japan) 4 Source: Greenhouse Gas Emissions in Hokkaido in FY 2003 (Hokkaido Government) 1. Characteristics of Hokkaido 1-３. The city gas industry in Hokkaido ■Ten city gas companies (nine private and one public) ■No. of customers: 876,000; gas sales volume: 500 million m3; diffusion rate: 57% ■Conversion from city gas to natural gas in Hokkaido will be completed this December (partially LPG) . ■Natural gas is received from the Yufutsu Gas Well via pipelines and LNG (using coastal vessels in the Hakodate area) . ※Year of completion for conversion to natural gas (approx. 880,000 customers) ※Supply area of Hokkaido Gas The central Hokkaido block (Sapporo, Chitose, Ishikari, Otaru, Tomakomai, etc.) Asahikawa Gas Hokkaido Gas (Kitami) receives natural gas from the Tomakomai Yufutsu area via pipelines. Hokkaido Gas (Otaru) Iwamizawa Gas Asahikawa Gas Hokkaido Gas (Sapporo) Obihiro Gas (Ebetsu) Kushiro Gas Hokkaido Gas (Chitose) Tomakomai Gas Yufutsu Gas Well Muroran Gas (Japan Petroleum Exploration Co., Ltd.) LNG liquefied in Yufutsu is transported to Hokkaido Gas the Asahikawa, Obihiro, Kushiro and Kitami The Hakodate area receives (Hakodate) areas in railway containers (to the Muroran LNG via the North Pioneer 5 and Iwamizawa areas in lorries) . coastal tanker. 1. Characteristics of Hokkaido 1-４. Natural gas demand in Hokkaido Millions of m3 Increased by a factor of 1.6 600 over ten years 500 400 300 200 100 0 19971998199920002001200220032004200520062007 Industrial users' needs for natural gas Promotion of energy policies in Hokkaido (2007 survey by the Hokkaido Bureau of Economy, Trade and (Excerpt from a 2007 report by the Hokkaido Bureau of Industry) Economy, Trade and Industry) Estimation of the need for conversion to natural gas by region ◆ Thousands of m3 An increase in the introduction of natural gas is expected due to potential need for natural gas in Hokkaido, future increases in energy demand, the need to ensure energy security, global environmental issues, etc. ◆Strategies including the establishment of a supply Southern Hokkaido Kamikawa infrastructure in Hokkaido with a view to importing Kushiro/Abashiri Tokachi LNG are necessary to meet future needs for natural gas by Iburi Central Hokkaido industries, etc., since most natural gas in Hokkaido is currently supplied by the Yufutsu Gas Well. 6 Specifically Future introduction Already introduced considered considered 2. Overview of Hokkaido Gas Co., Ltd. ２-１. Company profile ■Establishment: 1911 ■Supply areas: Sapporo, Otaru, Hakodate, Chitose, Ishikari, Kitahiroshima, Eniwa, Hokuto and Kitami (City gas is supplied to nine cities.) ■No. of customers: 563,000 ■Volume of gas sales: 398 million m3 ■Diffusion rate: 55.3% ■Sales volume: ¥52.4 billion ■Capital: ¥5.04 billion ■No. of employees: 664 Kitami Sapporo/Otaru/Chitose/Ishikari/Kitahiroshima/Eniwa Hakodate/Hokuto 7 2. Overview of Hokkaido Gas Co., Ltd. ２-２. The Progress 2020 Medium-term Management Plan ■Developed in April last year to promote the expansion of naturalgas usage in Hokkaido ■Management goals ○Volume of city gas sales: 700 million m3 in FY 2020 (398 million m3 in FY 2008) ○ Total sales: ¥100 billion in FY 2020 (¥69 billion in FY 2008) ※Consolidated ■ Four priority tasks: ①①SSteadteadyy p prorommootitoionn o of fs saafefetyty enh enhaanncceemmeentnt ②②CCononssooliliddaatitonion o of fr ereggioionnallallyy c culultitvivaatedted s saaleless ③③EEsstatabblilsishhmmenent to of fa a g gaass s suuppplplyy ba bassee f rfroomm a a l olongng-t-etermrm s statanndpodpointint ④④PrProommootiotionn o of fg grroouupp s strturucctuturalral r reefoformrm 8 ２．Overview of Hokkaido Gas Co., Ltd. Priority task ③:Establishment of a gas supply base from a long-term standpoint Significance of constructing an LNG base in Hokkaido ■ Establishment of an energy supply base in Hokkaido (expansion ofthe use of natural gas) ■ Improved security of supplies through diversification of supply sources ■ Long-term infrastructure development to prepare for future increases in demand (ensuring supply capacity) Scheduled construction site Ishikari Bay New Port Ishikari Sapporo 9 ２．Overview of Hokkaido Gas Co.,Ltd. Overview of the Ishikari LNG base ・Construction site: ShikoChuo 4-chome, Ishikari (East side of Zone No. 3, central wharf of Ishikari Bay New Port) ・Site area: approx. 100,000 m2 ・Main facilities： LNG tank (180,000 KL×1) ↑Artist's rendering of the PC-type LNG vaporizer above-ground LNG tank Receiving berth for ocean LNG vessels Shipping berth for coastal LNG vessels Truck shipping facility, etc. ・Scheduled construction term： Construction commenced in August 2008 Operation to be started in December 2012 3 ・Total project cost: approx. 40 billion yen 145,000-m -class MOSS-type LNG vessel 10 (artist's rendering) ２．Overview of Hokkaido Gas Co., Ltd. Future vision of the natural gas value chain Material Transport Sales/service procurement Yufutsu Gas Well Pipe network Customers ・Use in kitchens, hot water supply, air conditioning, power generation, etc. ・Safety inspections, maintenance service, etc. ・Energy solutions, etc. Ishikari LNG base LNG railway container Gas company, heat supplier LNG truck transport Hakodate coastal On-site supplier LNG can be supplied LNG base Coastal LNG vessel directly to on-site facilities at factories, etc. Optimal combination of natural Diverse forms of LNG supply in Results of the spread of natural gas produced in Hokkaido and addition to pipelines gas usage: at the LNG base (complete (diversification of supply means and ◆ Reduction of environmental burdens supply base/mutual improvement in realization of a wide-area supply system) in Hokkaido ◆ value) Contribution to stable energy supply 11 3. Specific Details of Sales Strategies ３-１. Status of the gas market ■Volume of gas sales After a long period of year-on-year increases in the volume of gas sales thanks to rising commercial and industrial demand, the figure decreased (by 0.6%)in FY 2008 compared to the previous period for the first time in 61 years due to economic stagnation and high winter temperatures. Changes i【nガス the販売 vo量luのm推e移】 of gas sales 販 450 ) 売3 398 量 m 398 in o 400 362 百li 万il m 5.0% ( ? j s 350 9.3% e 332 l 332 a s 314 f o 300 e 17.1% m lu o 250 V 200 40.0% 150 医療用 Medical 100 P公用ublic I工業用ndustrial 50 28.6% C商業用ommercial R家庭用esidential 0 2004 2005 2006 2007 2008 FY年度 12 3. Specific Details of Sales Strategies Examples of advanced natural gas usage Regional air-conditioning High-efficiency central High-efficiency gas systems heating turbine power generation Natural gas co-generation Natural gas vehicles Household fuel cells 13 3. Specific Details of Sales Strategies ３-１.Status of the gas market ■Number of customers/diffusion rate The number of gas customers is decreasing yearly as the number of removals associated with the demolition of buildings and switching to other energy sources exceeds the number of new customers. The diffusion rate has decreased by 6.2% in the last five years. Changes in the 【nおum客beさまr 件of数 cu・普及stom率の推ers/d移】iffusion rate ds n a 570 64% 件s 普 te a 数ou 及 567 r h t n 566 率 （n io i ( s 千 61.7% u s 565 62% r ff 件 i e 563 D m ）o t 60.3% s u 59.8% c 560 60% f o .
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