4
25 24 Tokyo Gas Group CSR Report 2016 Enhancement of Energy Security Stable Supply Highlights of Key Activities Qatar Sakhalin Cameron Queensland Curtis Gorgon Pluto Ichthys Darwin NWS Tokyo Brunei Malaysia Cove Point New LNG projects Existing LNG projects Signed a basic agreement on LNG sale and purchase from the Cameron LNG Project in the U.S. In March 2016, we signed a heads of agreement with Diamond Gas International Pte. Ltd. (DGI), a wholly owned subsidiary of Mitsubishi Corporation, for the sale and purchase of LNG from the Cameron LNG Project in the state of Louisiana. This project will see construction of a new natural gas liquefaction plant at the Cameron LNG Terminal to refine and liquefy shale gas and other U.S.-produced natural gas, and will export about 12 million tons per year. DGI will handle some 4 million tons of this per year, of which approximately 200,000 tons will be purchased by Tokyo Gas from DGI at a price linked to the Henry Hub price. With this agreement, Tokyo Gas purchases at prices linked to the Henry Hub price will reach a total of some 2.12 million tons per year from 2020 onwards. The effect will be to further diversify our LNG sources, price indices, and destinations. Strategic alliances on LNG procurements Following on from our agreement with Korea Gas Corporation in 2014, in August 2015 we signed a memorandum of understanding on strategic collaboration with Taiwan’s largest oil and gas company, CPC Corporation. This is expected to lead to cooperation in a wide range of fields, including collaboration on LNG-related engineering and technologies and use of energy services, as well as LNG procurement and supply sharing. In April 2016, we reached an agreement with Kansai Electric Power Co., Inc. to collaborate on fuel procurements and technologies relating to the operation and maintenance of power plants. Looking ahead, we will continue to bolster our partnerships with buyers in Japan and abroad to bring down raw material costs and achieve more reasonable prices in the Asian market. Participation in the Eagle Ford shale gas development in the U.S. In June 2016, Tokyo Gas America Ltd. (a wholly owned subsidiary of Tokyo Gas) created a new subsidiary called TG Eagle Ford Resources LP (TGER), through which it acquired participating interests in development of Eagle Ford shale gas assets held in Texas by the VirTex Group. This is Tokyo Gas’s second acquisition of participating interests in shale gas development in the U.S., the first being the shale gas development project in the Barnett Shale. TGER’s stake in gas production is estimated to come to about 200,000 tons per year in LNG equivalent (20-year average), which will be sold on the domestic U.S. market. Our plan is to actively expand overseas with the goal of increasing involvement in upstream operations in other countries and further developing LNG value chains. Raw Materials Procurement to Ensure Stable and Affordable Supply With more now expected of natural gas following the 2011 Great East Japan Earthquake and Japan’s energy industry undergoing major changes due to the full liberalization of the gas and electricity retail sectors, Tokyo Gas Group recognizes that providing society with inexpensive, stable supplies of energy stands high on the list of the public’s concerns, and is committed to pursuing a range of measures to meet society’s expectations. The Group is pursuing stable, low-cost procurement of raw materials through a range of strategies, including diversification of sources and contract conditions, and entering partnerships with buyers in Japan and abroad. Triple Diversification 1 Procurement sources We will examine ways to broaden our procurement sources to include North America and other regions as well as our current sources in Southeast Asia and Australia. We will also adopt unconventional gas resources such as shale gas as part of our moves to improve supply continuity. Prices will be stabilized by making balanced use of two forms of contracts: contracts linked to oil market prices (as used to date), and contracts linked to Henry Hub (U.S. natural gas market) prices. We will also improve procurement flexibility by using a combination of long-, medium-, and short-term contracts, and by making expanded use of contracts offering greater destination flexibility. We will acquire gas fields, power plants, and similar assets on a global basis. By developing an LNG network linking the markets of Asia, North America, and Europe, we will also work to shrink regional disparities in market prices, creating an environment that allows for flexible supply and demand adjustments. 2 Contract conditions 3 LNG network PMC provided for capacity expansion work at Map Ta Phut LNG Receiving Terminal in Thailand In February 2014, TGES was awarded by PTT LNG Co., Ltd. of Thailand to be the project management consultant (PMC) for a capacity expansion project at the company’s Map Ta Phut LNG Receiving Terminal. This is the first time a Japanese company has been contracted to provide project management consultancy services for a project at an overseas LNG receiving terminal. Thailand’s first LNG receiving terminal, Map Ta Phut LNG Receiving Terminal commenced operation in 2011 and currently receives about 5 million tons of LNG per year. The project will raise its capacity to around 10 million tons per year. TGES will be PMC until the project’s scheduled completion at the end of March 2017, utilizing our abundant knowledge and technology of design, construction, operation and maintenance for LNG receiving terminal. Signed a basic agreement on first energy service plant in the U.S. In December 2015, TGES America Ltd. (established jointly by Tokyo Gas Engineering Solutions Corp. (TGES) and Tokyo Gas America) signed a basic agreement with the Toray Group regarding the provision of steam and other energy services to a new plant to be built in the state of South Carolina by Toray Industries Inc. This is the first energy service project undertaken by TGES America, and it is also the Tokyo Gas Group’s first energy service project in North America. We will continue to leverage the Group’s technologies and expertise in the total energy business to develop local energy infrastructure and energy solutions for customers who are establishing operations in Southeast Asia and North America. Diversification and Expansion of Overseas Business We are developing LNG value chains overseas that will contribute to ensuring energy supply continuity in Japan and other countries. TGES was contracted from the design stage for Phase II work at Thailand’s Map Ta Phut LNG Receiving Terminal. Four or five companies were considered and compared when the basic design and other work were put out for tender. TGES was chosen not only because of its advanced engineering capabilities, but also because of its own experience in operating terminals. After we chose TGES, I visited Tokyo Gas’s Negishi LNG Terminal and was impressed by its location next to a built-up area. I learned a lot about how good relations are built with local residents regarding safety and environmental matters. Concern for the environment is of tremendous importance at Map Ta Phut, too. The terminal is distinguished by the shallowness of the surrounding sea, making it necessary to avoid dredging as much as possible due to the serious impact it would have on the environment. TGES was able to bring its advanced engineering skills to bear on this challenge as well, delivering support from the basic planning stage on. We are delighted with TGES’ extensive expertise and the attentiveness and appropriateness of their consulting services and suggestions for improvements. Technological Expertise and Extensive Experience Clinch the Deal Rattikool Piyavongwanich Project Director PTT LNG Co., Ltd. VOICE Map Ta Phut LNG Receiving Terminal expansion project in Thailand

Enhancement of Energy Security Stable Supply...In order to further expand stable and competitive power sources and increase electricity sales amid the major changes in the energy environment

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2524 Tokyo Gas Group CSR Report 2016

Enhancement of Energy Security | Stable Supply

Highlights of Key Activities

Qatar

Sakhalin

Cameron

Queensland CurtisGorgon

Pluto

Ichthys

Darwin

NWS

Tokyo

Brunei

Malaysia

Cove Point

New LNG projects

Existing LNG projects

■ Signed a basic agreement on LNG sale and purchase from

the Cameron LNG Project in the U.S.

In March 2016, we signed a heads of agreement with Diamond Gas

International Pte. Ltd. (DGI), a wholly owned subsidiary of Mitsubishi

Corporation, for the sale and purchase of LNG from the Cameron

LNG Project in the state of Louisiana.

This project will see construction of a new natural gas liquefaction

plant at the Cameron LNG Terminal to refine and liquefy shale gas

and other U.S.-produced natural gas, and will export about 12 million

tons per year. DGI will handle some 4 million tons of this per year,

of which approximately 200,000 tons will be purchased by Tokyo

Gas from DGI at a price linked to the Henry Hub price. With this

agreement, Tokyo Gas purchases at prices linked to the Henry Hub

price will reach a total of some 2.12 million tons per year from 2020

onwards. The effect will be to further diversify our LNG sources, price

indices, and destinations.

■ Strategic alliances on LNG procurements

Following on from our agreement with Korea Gas Corporation in

2014, in August 2015 we signed a memorandum of understanding

on strategic collaboration with Taiwan’s largest oil and gas company,

CPC Corporation. This is expected to lead to cooperation in a wide

range of fields, including collaboration on LNG-related engineering

and technologies and use of energy services, as well as LNG

procurement and supply sharing. In April 2016, we reached an

agreement with Kansai Electric Power Co., Inc. to collaborate on

fuel procurements and technologies relating to the operation and

maintenance of power plants.

Looking ahead, we will continue to bolster our partnerships with

buyers in Japan and abroad to bring down raw material costs and

achieve more reasonable prices in the Asian market.

■ Participation in the Eagle Ford shale gas development in the

U.S.

In June 2016, Tokyo Gas America Ltd. (a wholly owned subsidiary of

Tokyo Gas) created a new subsidiary called TG Eagle Ford Resources

LP (TGER), through which it acquired participating interests in

development of Eagle Ford shale gas assets held in Texas by the

VirTex Group. This is Tokyo Gas’s second acquisition of

participating interests in shale gas development in the U.S., the

first being the shale gas development project in the Barnett Shale.

TGER’s stake in gas production is estimated to come to about

200,000 tons per year in LNG equivalent (20-year average), which

will be sold on the domestic U.S. market. Our plan is to actively

expand overseas with the goal of increasing involvement in upstream

operations in other countries and further developing LNG value

chains.

Raw Materials Procurement to Ensure Stable and Affordable Supply

With more now expected of natural gas following the 2011 Great East Japan Earthquake and Japan’s energy industry undergoing

major changes due to the full liberalization of the gas and electricity retail sectors, Tokyo Gas Group recognizes that providing

society with inexpensive, stable supplies of energy stands high on the list of the public’s concerns, and is committed to pursuing a

range of measures to meet society’s expectations.

The Group is pursuing stable, low-cost procurement of raw materials through a range of strategies, including diversification of sources and contract

conditions, and entering partnerships with buyers in Japan and abroad.

Triple Diversification

1 Procurement sources

We will examine ways to broaden our procurement sources to include North America and other regions as well as our current sources in Southeast Asia and Australia. We will also adopt unconventional gas resources such as shale gas as part of our moves to improve supply continuity.

Prices will be stabilized by making balanced use of two forms of contracts: contracts linked to oil market prices (as used to date), and contracts linked to Henry Hub (U.S. natural gas market) prices. We will also improve procurement flexibility by using a combination of long-, medium-, and short-term

contracts, and by making expanded use of contracts offering greater destination flexibility.

We will acquire gas fields, power plants, and similar assets on a global basis. By developing an LNG network linking the markets of Asia, North America, and Europe, we will also work to shrink regional disparities in market prices, creating an environment that allows for flexible supply and demand adjustments.

2 Contract conditions

3 LNG network

■ PMC provided for capacity expansion work at Map Ta Phut LNG Receiving Terminal in Thailand

In February 2014, TGES was awarded by PTT LNG Co., Ltd. of Thailand to be the project

management consultant (PMC) for a capacity expansion project at the company’s Map Ta

Phut LNG Receiving Terminal. This is the first time a Japanese company has been contracted

to provide project management consultancy services for a project at an overseas LNG

receiving terminal.

Thailand’s first LNG receiving terminal, Map Ta Phut LNG Receiving Terminal commenced

operation in 2011 and currently receives about 5 million tons of LNG per year. The project

will raise its capacity to around 10 million tons per year. TGES will be PMC until the project’s

scheduled completion at the end of March 2017, utilizing our abundant knowledge and

technology of design, construction, operation and maintenance for LNG receiving terminal.

■ Signed a basic agreement on first energy service plant in the

U.S.

In December 2015, TGES America Ltd. (established jointly by Tokyo

Gas Engineering Solutions Corp. (TGES) and Tokyo Gas America)

signed a basic agreement with the Toray Group regarding the

provision of steam and other energy services to a new plant to be

built in the state of South Carolina by Toray Industries Inc. This is the

first energy service project undertaken by TGES America, and it is also

the Tokyo Gas Group’s first energy service project in North America.

We will continue to leverage the Group’s technologies and

expertise in the total energy business to develop local energy

infrastructure and energy solutions for customers who are

establishing operations in Southeast Asia and North America.

Diversification and Expansion of Overseas BusinessWe are developing LNG value chains overseas that will contribute to ensuring energy supply continuity in Japan and other countries.

TGES was contracted from the design stage for Phase II work at Thailand’s Map Ta Phut LNG Receiving Terminal. Four

or five companies were considered and compared when the basic design and other work were put out for tender.

TGES was chosen not only because of its advanced engineering capabilities, but also because of its own experience in

operating terminals.

After we chose TGES, I visited Tokyo Gas’s Negishi LNG Terminal and was impressed by its location next to a built-up

area. I learned a lot about how good relations are built with local residents regarding safety and environmental matters.

Concern for the environment is of tremendous importance at Map Ta Phut, too. The terminal is distinguished by

the shallowness of the surrounding sea, making it necessary to avoid dredging as much as possible due to the serious

impact it would have on the environment. TGES was able to bring its advanced engineering skills to bear on this

challenge as well, delivering support from the basic planning stage on. We are delighted with TGES’ extensive expertise

and the attentiveness and appropriateness of their consulting services and suggestions for improvements.

Technological Expertise and Extensive Experience Clinch the Deal

Rattikool PiyavongwanichProject Director

PTT LNG Co., Ltd.

VOICE

Map Ta Phut LNG Receiving Terminal expansion project in Thailand

2726 Tokyo Gas Group CSR Report 2016

Enhancement of Energy Security | Stable Supply

Highlights of Key Activities

■ Expanding power generation and making power

procurement more flexible

We believe in the importance of delivering total solutions combining

gas and electricity to supply energy in a manner that matches

customer needs better than ever before. In order to secure stable

access to competitive power sources, we will develop a “power source

portfolio” combining base-load power sources with natural gas-fired

power generation.

The Group is expanding its presence in the electric power business

by making effective use of the LNG value chains we have developed

to date in the gas business, and currently owns power generating

capacity of around 1,600 MW (own stake).

We aim to expand this capacity in which we have a stake to around

3,000 MW by 2020. In addition to expanding our own power plants,

therefore, we have signed an agreement on electricity supply with

Kobelco Power Moka Inc. (a wholly owned subsidiary of Kobe Steel,

Ltd.) and have committed to receiving 1,200 MW of electric power

beginning in 2019.

■ Stable generation of electricity

The Group’s thermal-fired power generations use natural gas

produced at our LNG terminals. These generations are operated,

monitored, and undergo daily checks and periodic inspections to

ensure continued supply stability.

Looking ahead, we will continue to leverage our expertise in

the gas business to meet society’s demands and expectations

as an energy company, and to deliver safer, more stable, and

more affordable electricity while doing our best to protect the

environment.

■ New power retailer Synergia Power Co., Ltd. established

In October 2015, Tokyo Gas and Tohoku Electric Power Co., Inc.

established Synergia Power Co., Ltd., which commenced retail sale of

electricity to high-voltage and extra-high-voltage customers in the

Kanto region (primarily in northern Kanto) in April 2016. The company

will make maximum use of its two backers’ operational know-how and

competitive generating capacity to promote optimized, comfortable

energy use by users, lower their energy costs, and so contribute to

regional economic revitalization.

Saitama Pref.

東京湾

Tokyo

Chiba Pref.

Gunma Pref.

Tochigi Pref.

Ibaraki Pref.

Fukushima Pref.

Sodegaura LNG Terminal

Negishi LNG Terminal Ohgishima LNG Terminal

Hitachi LNG Terminal

Kanagawa Pref.

Ibaraki-Tochigi Line

Hitachi-Onahama Line (name provisional)

Ibaraki Line

Tokyo Gas high-pressure pipelines (under construction)

Tokyo Gas high-pressure pipelines (construction planned)

Tokyo Gas high-pressure pipelines (planned in mid/long term)

Tokyo Gas high-pressure pipelines (existing)

Koga-Moka Line (FY2017)

Saito Line

Onahama Satellite Terminal

Hitachi LNG Terminal

Planned development of our natural gas infrastructure

Infrastructure Development to Accommodate Wider Use of Natural Gas Expansion of Competitive Generating Capacity and Electricity SalesWe will expand our supply capacity to meet latent natural gas demand in and around the northern Kanto region, and further increase

supply stability by creating a pipeline loop.

In order to further expand stable and competitive power sources and increase electricity sales amid the major changes in the energy

environment (including reforms to the electric power and gas system), we will further expand generating capacity with the goal of

increasing the capacity in which we have a stake to approximately 3,000 MW by 2020.

■ Supply infrastructure stability improved by Hitachi LNG

Terminal and new trunk lines

In March 2016, the Hitachi LNG Terminal in the Hitachi district of

Ibaraki Port (the fi rst terminal to be built by Tokyo Gas outside Tokyo

Bay) entered commercial operation. Two new high-pressure gas

pipelines, the Saito Line and the Ibaraki-Tochigi Line, also entered use.

These give Tokyo Gas a 950 km high-pressure gas pipeline network

centered on the Tokyo metropolitan area, and the linkage of this

terminal with our three existing terminals*1 around Tokyo Bay will

improve the stability of our supply infrastructure as a whole.

We aim to complete a second LNG storage tank at the Hitachi LNG

terminal by 2020. We will also continue construction of the Koga-

Moka Line and plan to construct a new Ibaraki Line, adding more

looping to our high-pressure pipeline network to raise energy security

throughout the Kanto region.

*1 Negishi LNG Terminal (Yokohama City, Kanagawa Prefecture), Sodegaura LNG Terminal (Sodegaura City, Chiba Prefecture), Ohgishima LNG Terminal (Yokohama City, Kanagawa Prefecture).

■ Onahama Satellite Terminal enters commercial operation

In January 2016 we completed work on the Onahama Satellite Terminal

under construction at Sakai Chemical Industry Co., Ltd.’s Onahama

Manufacturing Site (in Iwaki City, Fukushima Prefecture), and it has

now begun supplying natural gas via the Onahama medium-pressure

pipeline.*2 This is the first time we have built and run our own satellite

terminal to supply natural gas in Fukushima Prefecture.

Satellite terminals are gas production plants that supply natural gas

to regions that cannot feasibly be reached by extending existing gas

pipelines. Gas is delivered to the terminal by LNG tanker trucks to be

stored locally before being vaporized and supplied by gas pipeline. LNG

for Onahama is shipped and transported from the Hitachi LNG Terminal,

and the natural gas vaporized at Onahama is fed to the Onahama

medium-pressure line.*2 A new 3.9 km medium-pressure gas pipeline built to supply natural gas to customers living

near the Onahama Satellite Terminal.

Ohgishima Power Station

■ Unit 3 at the Ohgishima Power Station enters commercial

operation

In February 2016, Ohgishima Power Co., Ltd. (a firm founded with

investment from Tokyo Gas and Showa Shell Sekiyu K.K.) commenced

commercial operations at Unit 3 of the Ohgishima Power Station.

Ohgishima Power Station is a thermal power station that supplies

energy produced using environmentally friendly natural gas and

super energy efficient gas turbine combined cycle technology, and

its first two units entered operation in March and July 2010. Work on a

third unit began in June 2013 in order to contribute to stable, efficient

electricity supply in the Tokyo metropolitan area following the Great

East Japan Earthquake.

Unit 3 has a maximum efficiency of approximately 58% (on a lower

heating value basis at the generation end) and power generation

capacity of 407 MW, and its entry into operation takes Ohgishima

Power Station’s generating capacity to approximately 1,221 MW.

2928 Tokyo Gas Group CSR Report 2016

Enhancement of Energy Security | The Pursuit of Safety

Highlights of Key Activities

Vent stackVaporizers

Radio tower

Governor station

Gas imported

Gas produced

Gas delivered

To customers

High/medium-pressure pipelines

Tokyo Gas prepares for a major earthquake through a combination of three types of measures: preventive measures, emergency

measures, and recovery measures.

We engage in various services and activities to ensure that gas appliances and equipment are safe and easy for customers to use.

These include inspections, emergency dispatch services, and the development of safer appliances and equipment.

■ Periodic safety inspections of gas equipment every three years

To ensure customers’ safe use of gas,

specialized service personnel conduct

onsite safety inspections to check for

gas leaks from pipes and examine the

customer’s own gas appliances and

air supply and exhaust systems, as

required by the Gas Business Act.

■ “Pointing and checking” for worksite safety

We are working to prevent human

error and enhance safety by ensuring

that our staff always follow “point and

check” procedures when performing

periodic safety inspections, starting

gas service, maintaining gas

appliances, and other tasks.

■ “Gaslight 24” : 24-hour emergency dispatch system

Some 600 experts are on call at 49

locations throughout our service

area (divided into 5 blocks), ready to

respond, 24 hours a day and 365 days

a year, the moment a gas leak from

a pipeline or customer equipment is

reported.

■ Safety measures for gas appliances/equipment

We continue to develop gas appliances/equipment with even more

advanced safety functions.

Safety Measures at Customer Sites

Imported LNG is stored in LNG tanks that have no risk of leaking even in a major earthquake.

The Supply Control Center comprehensively monitors gas production and supply and precisely controls them around the clock, 365 days a year. In the event of an earthquake, the Center gathers information through the earthquake disaster prevention system and remotely stops gas supply.

Designed to connect terminals with district pressure regulators, high/medium-pressure pipelines use welded joint steel pipes, which have excellent strength and flexibility and can withstand large ground movements.

Gasholders store smaller amounts of gas to send out according to demand. They are constructed of multiple steel plates joined together to form a robust structure.

District pressure regulators reduce gas pressure from medium to low before it is sent out to customers. There are approximately 4,000 district pressure regulators across the Tokyo Gas service area, and all are equipped with earthquake sensors and emergency shut-off devices. When a large earthquake is detected, the gas supply is shut off.

Arrangements are in place to enable more than 200 city gas companies across Japan to assist one another via the Japan Gas Association with restoring supplies following a major disaster.

In July 2014 we launched a system for remotely restarting district pressure regulators without having to send specialized personnel to do it on the spot.

Customers will be notified of procedures*1 to reset gas meters and stop/restart status of gas supply through TV, the Internet and other media.

*1 Instructions on how to reset gas meters are provided on an attached label.

Low-pressure pipelines, accounting for about 90% of the total length of our gas pipelines, consist of polyethylene pipes which flex and are thus less likely to rupture.

The pipeline networks are divided into 25 medium-pressure blocks and 252 low-pressure blocks. Emergency measures (i.e., decisions on whether to stop or continue supply) are taken at the individual block level according to the degree of damage.Note: As of June 2016

Upon detecting an abnormal gas flow or an earthquake measuring 5 or greater on the Japanese seismic scale, intelligent gas meters automatically shut off the gas supply to the homes where they are installed.

Supply Control CenterIntelligent gas meters

SUPREME is our earthquake disaster prevention system using a highly concentrated network of earthquake sensors (approximately one sensor per square kilometer). SUPREME quickly collects data from observation points, remotely suspends and restarts gas supplies at district pressure regulators, and measures damage to pipelines.

High/medium-pressure pipelines GasholdersLNG tanks

District pressure regulators

● Mutual support structure● Recovery systems

Recovery measures

Emergency measures

Preventive measures

Safe and swift resumption of gas supply

Gas supplies shut off swiftly to prevent secondary disasters

Highly earthquake resistant gas delivery facilities

● Notification of stop/recovery status

Low-pressure pipelines

Disaster prevention blocks ● Earthquake disaster prevention system

Post-earthquake TV broadcast Our website

1

5

7

6

8

2 3 4

LNG tanks

Low-pressure pipelines

District pressure regulators

Supply Control Center7

8

4

2

3

1

5

6

Intelligent gas meters

Disaster prevention blocks

Gasholders

We make maximum use of IT systems in order to work more efficiently and reduce the time it takes to

resume gas supply to areas where service has been suspended.

Tokyo Gas has rolled out a system for shutting off the supply of gas both to individual homes and buildings and entire regions by remote control. The pipeline network has also been sub-divided into smaller blocks to minimize disruption in the event that gas supplies have to be shut off in an emergency.

Critical facilities are designed to be more resistant to earthquakes and tsunami in order to minimize potential damage.Note: Additional seismic evaluations are being performed reflecting issues and events identified following the Great East Japan

Earthquake. We determine the necessity of additional measures based on tsunami projections and discussions on seismic design standards by the Central Disaster Management Council (Cabinet Office) and scientific societies.

■ How we protect safety of customers

Earthquake Disaster Prevention Measures

Integrated fire and gas alarmTriggers a buzzer and blinking light when it detects a fire, imperfect combustion, or a gas leak.

Gas cooking stoveEvery burner on gas stoves marketed since 2008 is equipped with a safety sensor to prevent overheating of cooking oil, a safety device to detect flame failure, and a self-extinguishing function. Some 1,580,000 units had been sold by the end of March 2016.

Gas valve with safety deviceAutomatically turns off gas when the soft gas tube ruptures or comes loose.

Fan heaterEquipped with a safety device to prevent imperfect combustion and detect flame failure.

Damage suffered by Saibu Gas Co., Ltd. during the 2016 Kumamoto Earthquakes, the main shock of

which struck during the early hours of April 16, 2016, led the Japan Gas Association to issue a request

for assistance from city gas companies across Japan. Together these companies formed the “Service

Restoration Task Force.” Tokyo Gas took part, and contributed some 1,300 personnel, more than it has

ever sent on such a mission before. Thanks to these combined efforts, gas service was restored to all

customers in the affected areas by April 30.

Dispatch of Service Restoration Task Force after the Kumamoto EarthquakesTOPICS

Trucks used by the task force

Assembly before patrol to restart gas supply

Steps in restoration of gas service

Onsite patrols to disconnect gas supply

Districts divided up

Under-road gas pipes repaired

District pressure regulators restarted

Onsite patrols to restart gas supply

All homes visited to disconnect gas at meters

Valves closed, and individual districts divided up

Underground gas pipes inspected and damage repaired

District pressure regulators that shut off gas restarted

All homes visited to confirm gas can be used safely

We put safety first to ensure that customers can put their trust in gas. We are committed to further ramping up our efforts to make

gas supplies safer and more disaster resilient.

3130 Tokyo Gas Group CSR Report 2016

Enhancement of Energy Security | Provision of Better Products and Services

Highlights of Key Activities

How We Use Customer Feedback in Management

Actively Informing the CustomerTokyo Gas believes that the key to remaining in the customer’s

choice is not what we provide, but whether what we provide delivers

customer satisfaction. Following our policy of always providing

high value-added products and services with the goal of enhancing

customer satisfaction, we use customer feedback to improve the

Group’s business.

We believe it is crucial to improve the quality of management by

incorporating customer feedback into our products and services.

The opinions and requests expressed by customers via calls to our

Customer Center, the Internet, and our service quality surveys are

shared within the company, all the way up to top management. This

feedback is actively utilized in our daily improvement activities and to

enhance the quality of our products and services.

In fiscal 2015 we received 20,784 comments and requests. Of these,

9.2% of these were thanks and appreciation, 11.6% were complaints,

and 79.2% were system requests. Customer feedback like this is

utilized by individual departments in their various improvement

activities. Some are also reported to customers via our website.

■ Service quality surveys

To help us meet diversifying customer needs, we monitor satisfaction

and work accuracy by conducting “service quality surveys” of key

services that bring us into contact with our customers.

Service Quality Surveys Conducted in FY2015(Satisfaction with Service Personnel)

Percentage responding “satisfied” or “somewhat satisfied” (5-step scale)

Periodic safety inspections of gas equipment 95.7%

Commencement of gas service 93.9%

Paid-for TES inspections 94.3%

Explanation of TES use 92.3%

Appliance repairs 95.7%

■ Proper information provision in accordance with the law and

voluntary standards

To ensure that our customers can

make properly informed decisions

when considering whether to

purchase Tokyo Gas Group’s

products or services, we comply

with the Act against Unjustifi able

Premiums and Misleading

Representations and work with legal

aff airs personnel when producing leafl ets, catalogs, and pamphlets

to ensure that they provide correct information. We also have

arrangements in place for training personnel involved with legal

aff airs and improving their skills.

To ensure safe use of the Group’s products and services, we

provide appropriate information and labeling in accordance with

Japan Industrial Standards (JIS) and Japan Gas Appliances Inspection

Association (JIA) guidelines, our own internal policies and standards,

and other relevant standards. We will also adhere to the sales rules

published by the Ministry of Economy, Trade and Industry to guide

the sales practices of new entrants following full liberalization of the

electricity retail market for home users. Following these rules, we will

make sure that our customers are always properly informed and that

sales activities are conducted without using any language that might

mislead the customer.

■ Tokyo Gas website

Our website functions as our point of contact with the customer.

Through it, customers can apply for various gas and electricity-related

services, get news on gas services in the event of emergencies such

as earthquakes and gas leaks, and access information provided for

individual and corporate customers. In addition to user manuals, we

publish a range of accessible information explaining our products and

services to help customers make informed purchasing decisions.

■ The Tokyo Gas Group’s locally based service network

Tokyo Gas LIFEVAL network was set up by Tokyo Gas to deliver individualized service and develop close ties with customers in order to better meet

their specific needs. It functions as a one-stop shop for products and services that will improve quality of life. As of July 1, 2016, the network consisted

of 35 corporations in 62 blocks.

Our Tokyo Gas LIFEVAL showrooms handle the arrangements for a range of city gas-related tasks, including periodic safety inspections, meter

readings, commencement and termination of gas service, the sale, repair, and installation of gas appliances, and applications for gas and electricity

service. They help local residents enjoy safe, environmentally friendly, comfortable lives by providing information on plumbing renovations

(especially for kitchens and bathrooms) and energy conservation and generation in the home, and they are also active in organizing events, such as

cooking classes using the latest equipment, that allow customers to see, feel, and experience gas

appliances in actual use.

Tokyo Gas provides LIFEVAL personnel with various objective-based and level-specific training to

enable them to master and improve their technical abilities and service skills. As well as assisting with

human resource development, Tokyo Gas helps the network deliver better services and proposals by

gathering and sharing customer feedback on LIFEVAL.

The Group further provides various services through its Enesta and Enefit outlets to contribute to

comfort in everyday life.

Enhancement of quality

Improvement of product and service development

Customers

Points noticed by our employeesOpinions and requests

Customer feedback system

Information sharing

Customer feedback collection

● Chair of Customer Satisfaction Promotion Committee (President)● CS meetings in each department● CS meetings with business partners

Improvement activities Customer Center

Service quality surveys

Contact with our customers

Top management

Top management EmployeesEmployees Partner

companiesPartner

companies

To ensure that our customers can use energy safely, securely, and comfortably, we actively provide information and community-

based support, and incorporate customer feedback into delivering better services.

Basic Policy

■ Giving form to customer feedback

Onsite service fee normally charged at time of repairs waived for gas appliances not covered by service contract (if connected to same meter).

Warranty periodFrom TES installation to

5th year(excluding warranty period)

15th year

14th year

13th year

12th year

11th year

10th year

9th year

8th year

7th year

6th year

TES installation End of contract

Annual maintenance

inspection

Warranty period

■Enrolling for the service offers the following benefits.● Warranty program (free)

Repair warranty

11th to 15th year from TES installation

Annual maintenance

inspection

Repair warranty

From end of warranty to 10th year from TES installation

● If not signed upEngineer visits to make repairs

onsite service fee engineering fee cost of parts

(parts charged for at cost)

Service expanded from April 1, 2015

● TES maintenance service agreement (fee charged)

Repair cost equals

Event at a Tokyo Gas LIFEVAL showroom

Training session for legal aff airs personnel

My job is to repair gas appliances and equipment, and I am constantly on the lookout for ways to shorten the time that

customers are without their gas appliances to reduce the inconvenience that causes. When customers contact us, we

listen carefully to what they want and the details of their problems, and when we visit them at home, we do our best to

perform repairs swiftly and appropriately. Once the repairs have been made, we make a point of explaining what had

been the fault or problem in an easy-to-understand way to set their minds at rest. We are also constantly working to

improve the quality of our repairs by, for example, sharing feedback from the customer once we get back to the office,

feeding it into improving our services, and actively undergoing training and taking part in contests to improve our repair

knowledge and skills.

We will continue to work to get the basics right and value our contacts with the customer to meet their needs as well

as possible, performing repairs so well that they will be glad to see us again whenever they need help.

Reassuring the Customer with Clear Explanations

Yoshitaka OmuraTeam Leader

Maintenance GroupAppliance Servicing Section

Tokyo Gas LIFEVAL Minato

VOICE

How the TES maintenance service system works

“End of contract notification” postcard with free onsite service coupon

Customer feedback Improvements made

● I’m signed up for the TES maintenance service and would like to see it extended to cover other gas appliances like stoves.

● Tokyo Gas should consider providing some other form of service after the 15-year contract expires.

1) The onsite service fee has been waived for breakdowns and other problems with gas appliances not normally covered during the term of the TES maintenance service contract.

Note 1: Gas appliances must be connected to the same gas meter as that covered by the customer’s TES maintenance service contract.

Note 2: If repairs are required, the customer is still charged an engineering fee and the cost of replacement parts.

2) The onsite service fee is waived for three years after the end of the maintenance service contract for breakdowns and other problems with TES appliances that were covered by the contract.

Note 3: Waived for customers who present an “End of contract notification” postcard bearing a free onsite service coupon.