Earth­sheltered LNG tank at the Ohgishima LNG Terminal General view of Ohgishima Power Station

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 3,000­5,000 MW, we have

been working on various projects. For example, we are constructing

natural gas­fired 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 TotalEnergy Business Department

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 supply­demand balance.

Enhancing the Gas and Electricity Business Model to Meet Social Needs

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 in­ground 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 gas­fired 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 in­ground 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 WatabeMachinery Group, Operation Department, Ohgishima LNG Terminal

Construction of the 3rd unit underway at OhgishimaPower Station

Gas turbine combined cycle power generation enablingsophisticated energy saving ability and a 400MW output,roughly the amount of power annually used by 800,000households

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 state­of­the­art, highly efficient

natural gas­fired thermal power stations allows us to supply eco­friendly 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.

The Group's Major Natural Gas­Fired 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 business-

ensured 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 safety­related 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

safety­related 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 safety­related activities and identify issues that need to be

addressed.

As a result, they have concluded that outsourcing practices for safety­related 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 safety­related 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 inter­departmental and inter­project coordination.

Hideaki AraiChief Executive

Aiming for an Even More Disaster­Resistant and SaferGas Supply

The Division's safety­related 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

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.

Background of the Year for Strengthening Safety

Our Efforts to Strengthen Safety

Satoru YasuokaChief Executive

Creating a Self­Transforming Organization inCooperation 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 non­standard procedures.

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.

Matsuhiko HatabaChief Executive

Establishing a More Realistic and Effective SystemWhile 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

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 real­world practices, and better ensure customer-

and safety­oriented actions.

Shin YamagamiChief Executive

Going Back to Basics to Foster Improvement andTransformation 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

safety at sea. The Division works in close cooperation with the local

Coast Guard, cargo­handling 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 hands­on 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.

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.

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.

Additional seismic evaluations are being performed in consideration of the issues identified in theGreat East Japan Earthquake. We determine the necessity of additional measures in view of tsunamiprojections and discussions on seismic design standards by the Central Disaster ManagementCouncil (Cabinet Office) and scientific societies.

Note:

Data as of May 2014Note:

Video Broadcast on TV after anEarthquake

Website

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.

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

For instructions of how to reset the gas meter, see the illustration on the attached label.Note:

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 2014About 12,000 Group employees participated in adrill assuming an earthquake directly beneathTokyo.