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Message from the CEO

New dynamisms are starting to emerge in the world’s primary energy supply. One is the dynamism seen in the strive to meet society’s call for stable supply now shifting toward a more price-competitive and environmentally friendly supply of energy. Another dynamism is in the technological innovations which are helping us to tap into unconventional energy resources such as deep-water oil/gas, shale gas, and coal bed methane, which had been traditionally considered to be economically unfeasible.

Along these dynamisms, there has been a significant shift in the functions anticipated in fossil fuels, which used to hold the primary role as stable, base energy supply along with their function as spot energy supply. However, nuclear power generation, with its price-competitiveness and environmental friendliness along with the long-term stability rewarded by abundant supply of mineral resources, has begun to dominate the role as a stable, base energy supply. Consequently, the main function of fossil fuels has shifted to fulfill the accommodations of peak demand fluctuation. In addition, while there are increasing needs for renewable energies such as wind and solar power, their supply instability makes it difficult to meet the requirements of peak demand fluctuations as their energy production can be unpredictable. Such environment will cast further spotlight on the environmentally friendly natural gas with its capacity to satisfy the　both side of supply and demand with flexibility.

Furthermore, there has also been a considerable change in the US natural gas market which used to be anticipated to import over 30 million tons per year of LNG by 2015 and, in future, to become one of the world’s largest importer. However, the dynamisms in technological innovations has accelerated the domestic developments of shale gas and coal bed methane in the United States, making the role of LNG significantly limited for the foreseeable future. This phenomenon is likely to be seen not only in the US market however also in any other regions where supply of natural gas and LNG will be subject to the availability of such unconventional resources.

Nonetheless, while the demand for natural gas as a peak taker continues to grow, such application within a limited region cannot fully meet the ever-growing demand. As the anticipation for natural gas to connect “beyond regions” is growing, LNG is the only vehicle which could realize such key function in the realm of natural gas industry.

Over thirty years, ever since the inception of the LNG industry, LNG Japan has established a solid foundation especially in Japan and East Asia which have been a center of world’s LNG trade. On top of such firm foundation, we are currently trying to create new dynamisms. Firstly, we are aiming to secure stable LNG supplies by developing unconventional energies such as coal bed methane. Secondly, we are aiming to add a new LNG supply base in West Africa by which will allow us to target European/American markets in the near future. Based on these new supply pillars, we will create a value of supply-demand adjustment between regions provided by the potency of LNG.

We aim to enhance our core competence, which we have cultivated around our solid customers in Japan and Asia, by adding new values to these dynamisms. “Value creation leveraged by our core competence” is our motto in initiating our new business innovations.

Yasunori TAKAGI, President and CEO