Profile of Japan LP Gas Association

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2 Profile of Japan LP Gas Association 1

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5 1-1 Review of the energy policy 2015 onwards 2017 onwards 2016 onwards 2019to2021? 2018 onwards 4

6 1-2 Structural reform of energy systems Fragile energy supply structure due to reliance on overseas resources Multi-layered supply structure based on the characteristics of each of the energies Enhancing of resilience in the domestic energy supply structure Market entry of diverse energy suppliers and expanded options for users 5

7 1-3 The position of LP Gas in the policy LP Gas s position Geopolitical risk is decreasing Well developed supply chain and stockpiling Distributed clean gaseous energy Policy direction The last resort in emergency case Enhancing resilient supply system Promoting usage of LP Gas as versatile energy Restructuring of the business foundation Marketing LP Gas co-generation (e.g. Ene-Farm) and GHP Developing overseas market of safety devices, etc. Promoting LP Gas-fueled vehicles in the transportation sector 6

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9 2-1Transition of LP Gas supply volume in Japan Total 18,145 16,055 17,061 15,381 15,270 (thousand tons) Source: Monthly Demand-Supply Report by the Japan LP Gas Association 8

10 2-2 Transition of Japan s LP Gas imports Total 13,440 12,181 12,973 11,574 11,604 (thousand tons) Source: Monthly Demand-Supply Report by the Japan LP Gas Association 9

11 2-3 Advancement of Natural Gas development projects around the world Via Arabian Bay (Approx. 18 days) Alaska (Approx. 7 days) Canada (Approx. 10 days) Prince Rupert (Approx. 10 days) Longview (Approx. 11 days) Indonesia (Approx. 6 days) Houston (Approx. 22 days) Mozambique, Tanzania (Approx. 15 days) Reduction of navigating days via Panama Canal (From 45 days to 22 days) Ichthys, Prelude (Approx. 8 days) Australia, East Timor (Approx. 8 days) Photo source: Panama Canal Authority 10

12 2-4 Transition of A.L. oil prices and CP(propane) prices ($/MT) 1,200 Arabian Light ($/bbl) 120 1,100 1, Saudi Arabia CP Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan

13 2-5 Price comparison between energies LP Gas (propane) LP Gas: Saudi Arabia CP Crude oil: Arabian Light LNG: CIF Crude oil LNG Source: Compiled based on trade statistics by the Ministry of Finance 12

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15 3-1 Transition of LP Gas demand in Japan (FY2005, ) Total 18,401 16,306 16,294 16,341 15,538 (thousand tons) (Source: LP Gas Demand Outlook by the Liquefied Petroleum Gas WG, Petroleum Products Demand Outlook Committee, METI.) 14

16 3-2 Projected transition of LP Gas demand in Japan (FY ) Total 15,734 15,739 15,668 15,702 15,814 (thousand tons) (Source: LP Gas Demand Outlook by the Liquefied Petroleum Gas WG, Petroleum Products Demand Outlook Committee, METI.) 15

17 3-3Roles and demand development of LP Gas National energy policy Generating LP Gas demand Basic Energy Plan Marketing LP Gas co-generation (e.g. Ene-Farm) and GHP Developing overseas market of safety devices, etc. Promoting LP Gas-fueled vehicles in the transportation sector Residential High Efficiency Water Heaters (ECO-JOZU) Home-use fuel cell (ENE-FARM) Interim report by government advisory councils Promoting LP Gas bulk supply system, etc. for emergency preparedness Promoting LP Gas-fueled vehicles Supporting the marketing of Ene-Farm Commercial and industrial FRP cylinder GHP Co-generation National Resilience Plan Fuel conversion PromotingLPGasbulksupplyunitsincitygasareaaswell Promoting gas co-generation, energy conservation facilities Transportation Advanced LP Gas automobiles Source: Mid to Long Term Outlook by the Japan LP Gas Association 16

18 3-4 Effect of Price Unit: thousand tons Sector Type Volume Difference from 2013 Industrial use Propane % City gas Propane % Chemical use Butane 1, % Residential and commercial use Propane 5, % Several sectors are experiencing sales boosted by the recent drop in prices. The core sector, residential and commercial, is struggling due to competition with other energies. Source: Japan LP Gas Association 17

19 3-5 Launch and Promotion of FRP cylinders schedule

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21 Messages Circumstances of LP Gas industry Energy market liberalization Intensified competition among energies LP Gas industry s challenges Ensuring supply security Diversifying supply sources Developing new demand Reducing importation cost Mutual benefit and harmony between gas suppliers and consumers 20

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