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May 30, 2007

Natural Gas Supply Company “Koga Energy Co., Ltd” Completed ~ Starting the LNG supply to large industrial customers and wholesale in Koga city, Shiga prefecture ~

Iwatani International Corporation

The construction of facilities owned by the natural gas supply company “Koga Energy Co., Ltd.” (Head office: Koga city, Shiga prefecture, President: Taihei Kato, who is also a director of Iwatani International) was completed on May 30, and the company is ready to start commercial operations to supply natural gas wholesale to Koga Kyodo Gas, Co. Ltd., which is transforming from a community gas firm to a general gas operator. It also offers a direct supply of natural gas to large industrial consumers. Providing natural gas wholesale by building the gas supply infrastructure and founding a company that owns the same is a first of its kind in Japan.
Koga Energy Co., Ltd. was founded on July 1, 2005 jointly by three corporations, Iwatani International(Headquarters: Tokyo and Osaka, President: Akiji Makino, Capital: 20 billion yen), Kansai Electric Power Co., Inc. (Headquarters: Osaka, President: Shosuke Mori, Capital: 489.3 billion yen) and Koga Kyodo Gas Co., Ltd. (Headquarters: Koga city, Shiga prefecture, President: Eichiro Nakamura, Capital: 200 million yen), and has already started a direct supply of natural gas from January 2007. Since its foundation, the company has been preparing for full-scale commercial operation, including wholesale supply.
The LNG transported in lorries by Iwatani from the Sakai LNG Center of Kansai Electric Power is gasified at a satellite base owned by Koga Energy, and supplied to consumers through main pipelines. We have built the necessary facilities, including the satellite base and gas pipelines, all of which are now complete, and the company is ready to start full-scale commercial supply. The LNG is directly supplied to large industrial consumers through main pipelines, and supplied wholesale to Koga Kyodo Gas through two pressure governors; installed in the supply area for household and commercial consumers. At present, an annual supply of 12,000 tons for direct supply and 3,000 tons for wholesale are planned.
Up to now, the common practice has been to supply LNG via existing grid pipelines owned by city gas operators, but laws revised following deregulation lowered the barriers among different energy industries, and facilitated the mutual entry into the public utilities business among competitive entities. To respond to the changing circumstances on the supply side and the needs of environmentally conscious consumers, a variety of innovative methods (*) have been implemented for today’s LNG supply. With a clean energy supply in mind, geometrical factors, and a flexible energy supply to satisfy customers’ demands in mind, Iwatani has also been actively promoting the LNG supply, which represents equivalent gaseous energy and equally low CO2 emissions as our main business, LPG. Our latest efforts are unique to Iwatani, with a wealth of experience in the distribution and storage of low-temperature gases, and represent a significant step forward in that we are proposing a new possibility for LNG supply.
We currently house three 100KL LNG storage tanks, with additional installation planned around next year to further stabilize future supply. We shall also pursue customer satisfaction and easier and more effective means of supply by utilizing business know-how accumulated by three corporations.
*1: LNG supply methods
(1) Satellite supply: To supply gas from the installation in the supply area, which accepts, stores and gasifies LNG transported by lorries.
(2) Consigned supply: To supply gas to institutional customers via gas pipelines owned by city gas companies.
(3) Wholesale supply: To distribute LNG to general gas operators by lorries, etc.
■ Company outline
Trade name: Koga Energy Co., Ltd.
Date of foundation: July 1, 2005
Head office: No. 12 Hinoki-ga-oka, Mizuguchi-cho, Koga, Shiga
President: Taihei Kato
Capital: 355 million yen (Iwatani 56%, Kansai Electric Power 34%, and Koga Kyodo Gas 10%)
Business: (1) Manufacture, supply and sales of city gas
(2) Design, construction and management of gas supply facilities
(3) Sales, rental, lease, installation, maintenance and management of gas apparatus and equipment
(4) Technological assistance and consulting on the city gas supply business
(5) All other businesses relating to or accompanying the above businesses
■ Company-owned facilities
Satellite base ..........................1
LNG tank .................................3 100KL tanks
Pneumatic carburetor..........4 1,500m3/h units
Hot water carburetor............2 3,000m3/h units
Calorie adjusting facility, Odorizer, Pipes, etc.