Key Point of President's Regular Press Conference

Key Point of President's Regular Press Conference

May 2013 Regular Press Conference: President Mizuno's Message

June 04, 2013
Chubu Electric Power Co.,Inc.

  • Today I would like to speak about
  • The status of our efforts to increase operational efficiency
  • Granting of export permission to the U.S. Freeport LNG project

I will commence by discussing our

Efforts to increase operational efficiency

  • I will commence by discussing the status of our efforts to increase operational efficiency.
  • As I indicated in our press conference on April 26, we again project a deficit for the current fiscal period. We must recognize that we are facing extremely severe operating conditions, which have seen us unable to avoid recording a deficit for three consecutive years, commencing the fiscal year before last.
  • To respond to this state of crisis, on April 26 we established the Office for Emergency Measures for Management Efficiency, with myself as Head. With the entire company working together, we will speed up the realization of increased operational efficiency, and ensure that measures are comprehensive.
  • On May 13, we proposed five measures to our labor union. These include:
  • The termination of operation of all of our current resort facilities, known as Ikoi no Ie, a total of 10 locations.
  • The termination of operation of all of the “Club Houses” that are used for purposes including conferences and meetings, a total of 14 locations.
  • The termination of our Workplace Teamwork Support System, which subsidizes expenses for employee social gatherings in order to increase the feeling of unity as a team.
  • These proposals represent important issues in terms of employee morale, and for this reason we are currently involved in serious and sincere discussions with our labor union concerning them.
  • In addition to this, we are working to eliminate approximately 30 buildings and 600 rooms from among our company housings and dormitories for single employees by the end of fiscal 2016.
  • As activities for all employees, we have also commenced efforts to reduce expenses for consumable goods in our offices, down to individual pencils and sheets of paper, and to reduce overtime hours by reexamining how procedures are conducted and coming up with ideas for improvements on that basis.
  • The effect of these measures on our balance sheet will be limited, but we intend that all employees should share an awareness of costs, and practice comprehensive cost reduction measures commencing with items that are familiar in their daily work.
  • We are strongly resolved to do all that we can towards speeding up our realization of increased operational efficiency and making the measures comprehensive, and with myself in the lead, we will focus our full efforts on overcoming the greatest crisis we have faced since the foundation of our company.

Granting of export permission to the U.S. Freeport LNG project

  • To continue, I will now look at the granting of export permission to the U.S. Freeport LNG project.
  • As I have informed you previously, we are involved in the U.S. Freeport LNG project, being conducted in Texas, together with Osaka Gas Co., Ltd. On May 17, U.S. time, the project received permission from the U.S. Department of Energy to conduct exports to nations that have not yet concluded a free trade agreement with the U.S.
  • The Japanese government, the relevant government agencies and their affiliated institutions, and Japan’s diplomatic mission in the U.S. are aware of our initiatives in this matter as Japanese enterprises, and we are extremely grateful for their efforts in holding discussions with the U.S. government towards the granting of export permission.
  • We consider the granting of export permission to the Freeport LNG project to be a major step towards the importation to Japan of LNG produced in the U.S.
  • At present, Freeport LNG Development, L.P., the developer of the project, is moving ahead with procedures to obtain permission from the Federal Energy Regulatory Commission for the construction of a liquefaction facility. Following the conclusion of the procedures necessary for obtaining permission for construction and other procedures, Freeport will determine the final project investment, and move ahead with the construction of the liquefaction facility.
  • Allow me to explain once again the significance of importation of LNG from the Freeport LNG project.
  • By obtaining rights for the use of the Freeport LNG terminal, Chubu Electric will gain a position as a company that liquefies and exports natural gas that it has itself procured in the U.S. market; that is, as an LNG producer.
  • By gaining this position as an LNG producer, we will be able to flexibly procure LNG without being restricted in terms of destination, and we will also be able to diversify LNG procurement costs through the introduction of LNG linked to U.S. gas prices.
  • We believe that this will not just increase our ability to procure LNG, but will make it possible for us to promote change in the LNG market as an LNG user.
  • In order to import U.S. LNG to Japan, in addition to procuring natural gas in the U.S. market, it will be necessary for us to secure new LNG tankers.
  • We intend to rise to the challenge of these new domains of LNG procurement, and to work to institute change in the LNG market.
  • We are also planning to station personnel permanently in the U.S., a move scheduled for this summer. We will move ahead with the preparations for the production and export of LNG, including the procurement of the raw material, natural gas, working towards the realization of importation of U.S. LNG to Japan.
  • That concludes my remarks for today.

Go to the Top of the Page