In addition to supplying city gas, Tokyo Gas is actively engaged in power generation from natural gas, taking advantage of its LNG Value Chain. Efforts are underway to stably supply gas and electricity to the Tokyo metropolitan area to meet increasing demand for natural gas and to contribute to easing the tight electricity supply demand balance. Earth sheltered LNG tank at the Ohgishima LNG Terminal General view of Ohgishima Power Station Enhancing the Gas and Electricity Business Model to Meet Social Needs With Japan's energy environment undergoing major changes, such as the full liberalization of the electricity retail market expected in 2016, it is essential for Tokyo Gas to provide energy even more tailored to the needs of customers. Toward this goal, we are considering a strategy to propose optimal solutions to customers by fully combining gas and electricity supply. For business and industrial customers, we will enhance energy services that offer menus that bring together gas, electricity and even thermal energy to suit their varied needs. For residential customers, we will start to sell electricity. This kind of strategy requires us to secure stable and competitive power sources. Under the Challenge 2020 Vision, which sets the goal of increasing our domestic power generation business to the range of 3,000 5,000 MW, we have been working on various projects. For example, we are constructing natural gas fired thermal power stations that take advantage of our LNG Value Chain and are seeking to secure renewable energy by launching a wind power business. Tokyo Gas will move beyond the conventional gas business and enhance the gas and electricity business model to meet the needs of society. Toshiyasu Ishii Executive Officer, General Manager of Total Energy Business Department
Expanding Energy Supply Stations in the Tokyo Metropolitan Area Ohgishima LNG Terminal's LNG Storage Capacity Increased from 600,000 to 850,000 kl The Ohgishima LNG Terminal is the third LNG terminal built by Tokyo Gas after those in Negishi and Sodegaura. It is a latest advanced terminal, accounting for about 30% of the city gas supplied by Tokyo Gas. Since being commissioned in 1998, the Ohgishima LNG Terminal has increased its capacity to meet the growing demand for natural gas; its fourth tank the world's largest in ground LNG tank was completed in October 2013 to provide an additional capacity of 250,000 kl. This has expanded the Terminal's LNG storage capacity from 600,000 to 850,000 kl, enhancing the stability of energy supply to the Tokyo metropolitan area. The Ohgishima LNG Terminal supplies fuel gas to two nearby natural gas fired thermal power stations partially owned by Tokyo Gas: the Ohgishima Power Station and the Kawasaki Natural Gas Power Station. Tokyo Gas plans to enhance its infrastructure base in line with the increase in demand to ensure that these facilities continue to serve as supply bases supporting energy stability in the Tokyo metropolitan area. Since joining Tokyo Gas, I have been involved in the project to construct the Unit 4 tank with responsibilities ranging from managing design to safety, quality and scheduling at the construction site. The Unit 4 tank is the world's largest in ground tank. The entire project team has worked together on the project with a firm resolution to fully leverage the knowledge accumulated by Tokyo Gas and support the stable supply of LNG. As a result, we have successfully and safely completed construction ahead of schedule and at low cost. I hope to use the expertise and experience I have gained through the project for future activities, such as expanding the infrastructure base. Taisuke Watabe Machinery Group, Operation Department, Ohgishima LNG Terminal
Boosting the Power Generation Business by Leveraging Our LNG Value Chain Increasing Ohgishima Power Station's Generation Capacity from 800 to 1,200 MW The Tokyo Gas Group is expanding its power generation business by taking advantage of the LNG Value Chain built through its gas operations, including LNG procurement capabilities and existing infrastructure (e.g., LNG terminals and pipelines). Moreover, the effective operation of state of the art, highly efficient natural gas fired thermal power stations allows us to supply eco friendly yet competitive electricity. Today, our total generation capacity amounts to approximately 2,000 MW (including facilities owned by other companies). The construction of Unit 3 of Ohgishima Power Station, which is key to our efforts to fulfill Challenge 2020 Vision, is making steady progress with commissioning slated for fiscal 2015. Once Unit 3 starts operation, the supply capacity of Ohgishima Power Station will increase from about 800 to 1,200 MW, bringing our total generation capacity to 2,400 MW. This will strengthen the Tokyo Gas Group's capacity as an energy supplier to the Tokyo metropolitan area, enabling us to more stably and competitively provide electricity to our customers. Construction of the 3rd unit underway at Ohgishima Power Station Gas turbine combined cycle power generation enabling sophisticated energy saving ability and a 400MW output, roughly the amount of power annually used by 800,000 households The Group's Major Natural Gas Fired Thermal Power Stations
Tokyo Gas has been committed to improving safety in its operations in order to ensure customer safety and security and to continuously meet customers' expectations into the future. Therefore it is regrettable that an incident of improper gas leakage repair was discovered in October 2013. We view it as serious enough to possibly shake the foundation of our gas businessensured safety. Reflecting on this incident, Tokyo Gas has designated fiscal 2014 as the Year for Strengthening Safety. With every employee resolved to make every possible effort to ensure safety, we are tackling challenges to strengthen safety under the initiative of four safety related divisions. Through these initiatives, Tokyo Gas will enhance its commitment to higher safety levels and work harder to deliver Safety, Security, and Reliability to our customers. Initiatives in theyear for Strengthening Safety Discussion by the Safety Enhancement and Review Division In the wake of the incident of improper gas leakage repair discovered in October 2013, Tokyo Gas established the Safety Enhancement and Review Division in December. Through this framework, four safety related divisions (Pipeline Network Division, Regional Development Marketing Division, Residential Sales and Service Division, and Energy Production Division) conducted independent and intense discussions to comprehensively review safety related activities and identify issues that need to be addressed. As a result, they have concluded that outsourcing practices for safety related tasks and the policy for local safety activities are the key issues and decided to investigate them further. These discussions are also expected to help the entire Group to improve its corporate and organizational culture. Strengthening Safety Now that fiscal 2014 has been designated as the Year for Strengthening Safety to implement safety promotion measures, the Tokyo Gas Group's four safety related divisions are implementing various initiatives suited to their respective safety characteristics, such as a review of actions constituting operations, the establishment of standards and manuals, and the improvement of safety systems. These safety activities have also prompted us to improve our corporate/organizational culture. The Group is taking an integrated approach to review how individuals manage their actions and tasks in the context of field activities, staff efforts, and inter departmental and inter project coordination.
Background of the Year for Strengthening Safety Our Efforts to Strengthen Safety Aiming for an Even More Disaster Resistant and Safer Gas Supply The Division's safety related operations are diverse, ranging from pipeline maintenance and management to preparedness for earthquakes and other disasters. I think the primary cause of incidents lies in the disparity in awareness between Tokyo Gas and our customers, in the perception of roles and responsibilities Hideaki Arai Chief Executive between Tokyo Gas and its outsourcing partners, and in differences of views between management and the field staff. Our efforts are focused on four key initiatives: (1) taking measures to prevent the recurrence of improper gas leakage repair; (2) assisting local branch offices to conduct regional emergency maintenance and preparing for earthquakes and other disasters; (3) resolving our inherent issues, such as house pipes and emergency maintenance activities; and (4) reshaping the way we work with outsourcing partners. Viewing fiscal 2014 as the year of transformation, the Division will swiftly and effectively implement measures to strengthen safety in pursuit of a gas supply system that is safer and more resistant to disasters.
Creating a Self Transforming Organization in Cooperation with the Head Office Area At our Division's local branch offices and affiliated city gas companies, a single employee is often responsible for wide-ranging tasks, from the operation of satellite terminals to the management of gas equipment safety. Yet the number of our facilities is limited, providing few opportunities to experience non standard procedures. Satoru Yasuoka Chief Executive Being aware of the need to enhance the expertise of its staff, the Division is developing human resources for safety operations. We have set up the following key initiatives: (1) improving the quality of safety operations, such as accepting emergency maintenance requests, issuing associated directions, and responding to earthquakes and other emergencies, through organizational approaches (e.g., close cooperation with highly specialized staff at head office); and (2) preventing the recurrence of safety incidents. The Division has recently developed its 10 Safety Principles. With these principles in mind, we will go back to the basics of safety and make efforts to provide peace of mind for gas users through effective use and improvement of systems to ensure that our work is performed in accordance with the basic rules. Establishing a More Realistic and Effective System While Putting Customers and Safety First The Division is responsible for ensuring the safety of facilities within customer premises. We make constant efforts to promote our customers' understanding of the need for maintenance and have built a collaborative support structure through shared objectives with Tokyo Gas LIFEVAL and contractors undertaking safety-related Matsuhiko Hataba Chief Executive operations. In fiscal 2014, the Division set up a Safety Enhancement Committee. The Committee is expected to (1) strengthen our system to support contractors and other outsourcing partners during the nighttime and holidays and in the event of emergency work and (2) review our standards and manuals. This is our attempt to eliminate ambiguities and discrepancies between standards and actual procedures, adjust our systems to real world practices, and better ensure customerand safety oriented actions. Going Back to Basics to Foster Improvement and Transformation toward Greater Safety and Security. Our Division handles large amounts of LNG and thus huge amounts of energy. This requires us to always pay close attention to the operations management and facilities management at each terminal, as well as security control. Since we accept more than 350 LNG carriers annually, we also recognize the importance of ensuring Shin Yamagami Chief Executive safety at sea. The Division works in close cooperation with the local Coast Guard, cargo handling subsidiaries and affiliates, and many other concerned parties.
Our key initiatives are (1) raising awareness, including safety consciousness and perception of responsibility; (2) educating young employees by giving them opportunity to gain hands on field experience; (3) strengthening partnerships with outsourcing partners with advanced expertise; and (4) reviewing our manuals and standards. The Division will increase the overall safety level by identifying discrepancies in standards and rules between the terminals and sharing best practices. Group Safety Organization (FY 2014)
Our Challenge 2020 Vision sets forth the goal of creating a gas supply system that is safer and more resistant to disasters. Tokyo Gas constantly strives to ensure the safe supply of city gas by preparing for large earthquakes based on three pillars: preventive measures, emergency response measures, and restoration measures.
How We Protect Customers Imported LNG is stored in LNG tanks that have no risk of leaking even in the event of a major earthquake. Designed to connect terminals with district governors, high/medium-pressure pipelines are composed of welded steel pipes, which have excellent strength and flexibility and can withstand large ground movements. A gas holder stores smaller amounts of gas to supply it according to demand. It is constructed of numerous steel plates joined together to form a robust structure.
Low-pressure pipelines account for about 90% of the total length of our gas pipelines and consist of polyethylene pipes, which are elastic and thus less likely to rupture. Note: Additional seismic evaluations are being performed in consideration of the issues identified in the Great East Japan Earthquake. We determine the necessity of additional measures in view of tsunami projections and discussions on seismic design standards by the Central Disaster Management Council (Cabinet Office) and scientific societies. A district governor reduces the pressure of gas from medium to low pressure before it is transferred to customers. There are approximately 4,000 district governors across the Tokyo Gas supply area, and they are equipped with earthquake sensors and emergency shut-off devices. The pipeline networks in the Tokyo metropolitan area are divided into 21 medium-pressure blocks and 207 low-pressure blocks. Emergency measures (i.e., decisions on whether to stop or continue supply) are taken for individual blocks according to the degree of damage. Note: Data as of May 2014 The Supply Control Center comprehensively monitors gas production and supply in order to properly control them around the clock, 365 days a year. In the event of an earthquake, it gathers information through the earthquake disaster management system and remotely stops gas supply. Earthquake Disaster Management System SUPREME is our earthquake disaster management system that uses earthquake sensors installed densely (approximately one sensor per square kilometer). The system quickly collects data from monitoring points, remotely turns off district governors, and measures damage to pipelines. Upon detecting an abnormal gas flow or an earthquake measuring 5 or greater on the Japanese seismic scale, a gas meter automatically shuts off gas supply to the house or building it is installed on.
Systems are in place to collect information on districts where gas is stopped so that the best way for restoration can be quickly determined, and to manage restoration work. Customers will be notified of procedures to reset the gas meter and the gas stop/restoration status through media such as TV and the Internet. Video Broadcast on TV after an Earthquake Website Note: For instructions of how to reset the gas meter, see the illustration on the attached label. To ensure mutual support in the event of a major disaster, more than 200 city gas companies across Japan are ready to cooperate for restoration through the Japan Gas Association. Safety Measures at Home Gas Equipment/Facilities with Advanced Safety Functions Disaster Drills At Tokyo Gas, all employees, including those from affiliates and cooperating partners, participate in annual
disaster drills. Our Supply Control Center, which plays the key role in initial response to an earthquake, also conducts more than 100 exercises every year. We also take part in joint drills with the national and local governments to prepare and enable our employees to respond appropriately to an emergency. <Link> Social Report / Efforts to Ensure Gas Safety / Earthquake and Disaster Measures Annual Disaster Drill in Fiscal 2014 About 12,000 Group employees participated in a drill assuming an earthquake directly beneath Tokyo.