Tokyo Gas : Introduction of Internal Companies

Introduction of Internal Companies

The holdings-type group structure

In FY2022, the Tokyo Gas Group shifted to a group structure in which quasi-branch companies and business subsidiaries are self-run and grow by working with the market and customers. In order to realize agile decision-making, we have expanded the discretion of the quasi-branch companies and business subsidiaries and pursue group synergy through intergroup collaboration.

Under the new business structure, we promote transformation into a group with multiple business pillars by improving the earning power of each business entity and resilience to fluctuations, and aim to realize Compass2030/Compass Action.

Here, we introduce the four companies and three key business subsidiaries of our Group.

Introduction	Introduction
Contents
CEO's	CEO's Message
Message
How	How We Create Value
We
The Value Creation Process

Organizational chart

Board of Directors

Representative Corporate

Executive Officer,

Presidentand CEO

Nominating Committee

Compensation Committee

Audit Committee

Audit Committee

Office

Create Value	Promoting Sustainability and Material issues
Business Strategy
	Compass2030 & Compass Action
Business	Compass Transformation 23-25
Strategy 1: Achieve both stable energy
supply & decarbonization
Strategy 2: Fully roll out Solutions
business
Strategy
Strategy 3: Realize a flexible corporate
culture resilient to change
Introduction of Internal Companies
CFO's Message

35 Tokyo Gas Group Integrated Report 2023

Corporate business

Energy Trading Company

Green Transformation Company

Customer & Business Solution Company

Global Business Company

Tokyo Gas Network Co., Ltd.

Tokyo Gas Engineering Solutions Corporation

Tokyo Gas Real Estate Co., Ltd.

Corporate	Corporate Strategy
Sustainability
Corporate Governance
Strategy
Financial Data	Financial Data
	Web Site
	Investor Relations Website
	Investors' Guide
	(Financial Data and Industry Data)
	Financial Results Presentation Materials
	Financial Results Bulletin
	Corporate Governance Report
	Sustainability Factbook

Energy Trading Company

Photo courtesy of: Principle Power Inc.

Green Transformation Company

Customer & Business Solution

Company

Global Business Company

36 Tokyo Gas Group Integrated Report 2023

This company includes the Raw Material Procurement Division, which engages in LNG contracts and transportation; the Electric Power Division, which deals with development and procurement of electric power sources; the Wholesale & Regional Service Division, which provides energy solutions to other gas companies and municipalities; and the Product Division, which operates LNG terminals and power plants. Through LNG as a commodity, we aim to leverage our strengths that derive from having abundant assets and customer connections to ensure a stable supply and maximize the value of energy. Furthermore, as market volatility is increasing, we will work to establish monetization models. As a leading company handling natural gas, we will take the lead toward net-zero CO2 and create environmental value.

GX Company was established in FY2023 as a specialized organization to promote decarbonization of electricity and gas. In the electricity sector, we are expanding the volume of renewable energy that we handle, and we have invested in Principle Power Inc., which has a proven track record in Europe, for floating offshore wind power, which is expected to be widely used in the future, and have begun studying a project in waters off the coast of Fukushima using the company's technology. In the gas sector, we are exploring the feasibility of multiple projects with the aim of building large-scale supply chains for e-methane. In addition, we are focusing on research to reduce the cost of hydrogen required for e-methane production and to develop high-precision wind forecasting tools to increase the efficiency of wind power generation.

Customer & Business Solutions Company provides customers with gas and electricity and solutions for homes and businesses. With "Resilience," "Optimization," and "Decarbonization" as the three forms of value we provide, we offer easy-to-understand, systematized solutions for our customers, contributing to the resolution of social issues and the creation of value. In the BtoC sector, we are strengthening not only LIFEVAL's customer contact points, but also digital contact points such as the member

site my TOKYOGAS. We are working to improve customer satisfaction. In the BtoB sector, we offer a comprehensive range of decarbonization products (CNL, renewable energy power, environmental consulting) to commercial and industrial customers, and also collaborate with local governments to create attractive towns, aiming to solve social issues by improving environmental sustainability.

In North America and Australia, Global Business Company has been engaging in resource development business, and in Southeast Asia, it has focused on LNG infrastructure projects by leveraging the know-how accumulated in Japan. In recent years, we have also focused on the renewable energy business in North America and Scandinavia. Going forward, we will continue replacing the asset portfolio while participating in growth areas, including the decarbonization field, and acquiring and utilizing functions that link our various businesses. We will promote collaboration among the businesses we have developed so far, and expand our earnings base across the board.

StrengthsRisks

StrengthsRisks

StrengthsRisks

StrengthsRisks

Abundant LNG-related assets (i.e., procurement contracts, terminals and carriers); LNG trading volume and trade management capabilities

Scale of electric power business (generation and retail)

Trade experiences

Problems in raw material procurement due to geopolitical risks, etc. related to the import of raw materials

Supply disruption due to damage to production, supply, power generation facilities, etc. caused by large scale disasters

Impact on earnings due to fluctuations in LNG and electricity wholesale market prices and costs of raw materials and fuels

Acquiring technology and knowledge based on alliances with overseas partners

Relationship cultivated in the power value chain from power sources development and to retail Hydrogen production know-how cultivated through fuel cell development, etc.

Declining competitiveness due to delayed implementation in society

Lagging behind in the technological innovation race

Uncertainty in international trading rules and system design for environmental value

Community-based sales network composed of LIFEVAL, Enesta, and other outlets,

a customer base of over 13 million accounts, the trust of customers

Expertise in work requiring technical capability at customers' homes (i.e., device installation, repairs, etc.) Energy solution technology and one-stop provision of gas, electricity, and solutions

Decrease in demand caused by intensified competition driven by liberalization and changes in lifestyle and business environment

Policy changes and acceleration by national and local governments, including laws, regulations, and systems Delay in technological development required to deal with competition and alternatives

Stable operating capability in LNG terminals, power generation projects, etc.

Expertise in resource development and LNG infrastructure business that we have cultivated so far

Stagnation of business operation, increase in expenses, and missing of business opportunities due to compliance with country-specific laws, regulations and/or business practices

Impact of fluctuations in crude oil/gas prices and foreign exchange rates on the revenue and expenditure of overseas business operations in general

			As of March 31, 2023
LNG carriers owned	LNG terminals
and managed by the
company
10 carriers			4 locations
LNG procurement	Gas generation capacity
4 countries			Gas power generation at
13 projects	Photo courtesy		4 locations in Japan
of INPEX
13 million tons	Corporation		1.533 million kW
Annaka Solar Power	Methanation facility
Plant

2030 Target

2030 Target

Number of businesses/

Renewable power

projects selected for public

source transaction

e-methane

offering by National Research

volume

1% deployed

and Development Agency

6 million kW

3 projects

Number of LIFEVAL and other stores

As of the end of

April 2023

Ibaraki

Gunma

Tochigi

Enesta

Enefit

Enesta

Enesta

2

3

6

1

Saitama

Chiba

LIFEVAL

Enesta

Enefit

LIFEVAL

Enefit

6

4

7

5

1

Kanagawa

Tokyo

LIFEVAL

Enefit

LIFEVAL

Enefit

31

9

34

33

Major business areas

As of March 31, 2023

Europe

2 bases

North America

1 business

Southeast

1 base

Asia

6 businesses

6 bases

8 businesses

Australia

1 base

5 businesses

Introduction	Introduction
	Contents
CEO's	CEO's Message
Message
How	How We Create Value
We
The Value Creation Process
CreateValue	Promoting Sustainability and Material issues
	Business Strategy
	Compass2030 & Compass Action
Business	Compass Transformation 23-25
	Strategy 1: Achieve both stable energy
		supply & decarbonization
		Strategy 2: Fully roll out Solutions
Strategy		business
CFO's Message
		Strategy 3: Realize a flexible corporate
		culture resilient to change
	Introduction of Internal Companies
Corporate	Corporate Strategy
	Sustainability
Strategy	Corporate Governance
FinancialData	Financial Data
		Web Site
		Investor Relations Website
		Investors' Guide
		(Financial Data and Industry Data)
	Financial Results Presentation Materials
		Financial Results Bulletin
		Corporate Governance Report
		Sustainability Factbook

Tokyo Gas Network Co., Ltd.

Tokyo Gas Engineering

Solutions Corporation

Tokyo Gas Real Estate Co., Ltd.

The Tokyo Gas Group has been expanding the use of natural gas while ensuring a safe and stable supply. Tokyo Gas Network has inherited the gas pipeline business from Tokyo Gas, and commenced operations on April 1, 2022. In addition to actively promoting sales of city gas and contribution to CO2 emission reductions at customer sites, we will improve value-added businesses by using smart meters and enhance regional value by collaborating with infrastructure operators, thereby maintaining industrial and technological innovation and a foundation for people's lives. We will also continue to promote the spread of natural gas and create environmental value by promoting gas-based low- carbonization and decarbonization.

Since the first LNG installation in Japan (1969), the Tokyo Gas Group has been consistently involved in the entire LNG value chain. Utilizing the technical strength and know-how we have cultivated throughout that involvement, we have provided solutions such as engineering and energy services for LNG terminal and pipeline construction in Japan and overseas. As a key business subsidiary, Tokyo Gas Engineering Solutions will provide one-stop services, gas, power, and engineering to solve challenges for corporate customers throughout Japan, and will expand the provision of low-carbonization and decarbonization solutions that combine renewable energy to create environmental value.

Taking full advantage of the land we have acquired over more than 130 years of business development, we have grown our office and residential leasing business centering on central Tokyo based on the concepts of stable earnings and improvement of asset value. We are also actively working on energy proposals and urban development based on our strong roots in the community through joint projects with business partners. In the future, we will work to achieve stable growth and increase revenue and efficiency through the expansion of development areas such as the establishment of a cyclical development model that incorporates our own developed properties into funds, participation in projects in Australia, and expansion

of assets into logistics facilities and expansion of development areas, while at the same time strengthening our competitiveness by accelerating ESG-based development. We will also contribute to sustainable urban development by developing properties that are highly resilient, comfortable and environmentally friendly.

StrengthsRisks

StrengthsRisks

StrengthsRisks

Many years of experience in safe and stable supply of gas

Ties with customers and communities that have been cultivated through the pipeline business

Supply disruption due to damage to supply facilities, etc. caused by large scale disasters

All-in-one proposal for service, energy and engineering

Insights accumulated from the user's perspective and engineering solutions cultivated through the management and operation of plants and facilities

Experience in engineering projects related to over 100 LNG terminals in 20 overseas countries

Rapid change in the market environment due to

intensified competition driven by liberalization and rapid progress in decarbonization

Policy changes and acceleration by national and local governments, including laws, regulations, and systems

Supply disruption due to damage to equipment and plants caused by large scale disasters

Ownership of high-quality lands in the Tokyo metropolitan area

Synergy achieved by leveraging the Group's expertise

Long-standing track record of operation and management of buildings

Decline in business potential due to real estate market conditions, increased competition, or other environmental changes (including infectious diseases)

Damage, malfunction, etc. of owned and managed properties caused by large-scale disasters (earthquakes, fires, floods, etc.)

Supply areas and pipeline networks	Ibaraki-Tochigi
Tokyo Gas					Trunk Line
		Utsunomiya
Network's	Gunma Trunk
Trunk Line Tochigi
high-pressure	Line		Koga-Moka
gas pipelines		Kumagaya-Sano	Line	Trunk Line
Tokyo Gas			Trunk Line	Saitou Trunk Line	Ibaraki
Network			Saihoku Trunk Line		No.2 Joso	Trunk Line
			Trunk Line
service area
	Saitama Trunk Line		Joso Trunk Line
		Tokyo Trunk Line
		Yokohama Trunk Line		Chiba-Kashima Line
			Chiba Trunk Line
			Shin-Negishi		No.2 Chiba Trunk Line
			Trunk Line
Total length of pipeline:		Keihin Trunk Line	Chuo Trunk Line
63,189km			Kaitei Trunk Line
		Wangan Douro Trunk Line
(As of March 31, 2023)

Domestic sales offices and business results

Energy service results	Hokkaido Sales
	Office
LNG terminal/LNG satellite results
Mapping system introduction		Nagano Sales
results
	Office

Niihama LNG Co., Ltd.

Kyushu Sales Office

				Okinawa Sales Office
JR Tamachi Station			Shibahama elementary school
	Pedestrian deck	Tower N
	Pullman Tokyo		Minato Park
	Tamachi*		Tamachi
			Station		Shibaura
Nagisa	Tamachi
Terrace	Station	Shibaura	Shibaura Park	Hospital
Tower S		School
		Nursery			Aiiku

Redevelopment area
msb Tamachi (musubu Tamachi)	*Hotel

Introduction	Introduction
Contents
CEO's	CEO's Message
Message
How	How We Create Value
We
The Value Creation Process
Create Value	Promoting Sustainability and Material issues
Business Strategy
	Compass2030 & Compass Action
Business	Compass Transformation 23-25
	Strategy 1: Achieve both stable energy
	supply & decarbonization
	Strategy 2: Fully roll out Solutions
	business
Strategy
	Strategy 3: Realize a flexible corporate
	culture resilient to change
Introduction of Internal Companies
CFO's Message
Corporate	Corporate Strategy
Sustainability
Corporate Governance
Strategy
Financial Data	Financial Data
		Web Site
		Investor Relations Website
		Investors' Guide
		(Financial Data and Industry Data)
	Financial Results Presentation Materials
		Financial Results Bulletin

Photo courtesy of INPEX Corporation

37 Tokyo Gas Group Integrated Report 2023

Corporate Governance Report

Sustainability Factbook