Agreement for construction of a natural gas pipeline for large corporate customers from Southwest Fukuroi to Southeast Kakegawa, Shizuoka Prefecture and establishment of a new company to supply gas

This is to announce that Chubu Gas Company, Ltd. (President & Representative Director: Shoji Nakamura; below, ‘Chubu Gas'), Chubu Electric Power Co., Inc. (President & Director: Akihisa Mizuno; below ‘Chubu Electric Power') and Shizuoka Gas Company, Ltd. (President and Director: Hiroshi Tonoya; below ‘Shizuoka Gas) signed a basic agreement to establish a new company that will build a natural gas pipeline called "South Kakegawa Pipeline" (tentative name) and supply gas for new large corporate customers.

As providers of local energy supply, Chubu Gas, Chubu Electric Power, and Shizuoka Gas (collectively, ‘the three companies') shared the common view that building a stable natural gas supply system would lead to regional development. The companies have been considering utilizing the Shizuhama Trunkline high-pressure natural gas pipeline between Shizuoka and Hamamatsu that is being jointly constructed by Chubu Gas and Shizuoka Gas (scheduled for operation from 2013) to increase widespread use of natural gas in that region.

In response to strong demand for natural gas supply from customers in the region from southwest Fukuroi City in Shizuoka Prefecture (previously Asaba-cho) to southeast Kakegawa City (previously Daito-cho), the three companies have reached a basic agreement towards establishing a new company that will build a "South Kakegawa Pipeline" (tentative name) and supply gas.

From now, based on this basic agreement, the three companies will pursue further negotiations towards establishing the new company. In addition, they will begin detailed considerations of pipeline route, specifications, and other details aimed towards actual construction of the pipeline, and begin sales marketing activities to customers. The target for starting supply of gas through the pipeline is the end of 2013, after the Shizuhama Trunkline has become operational, with supply for each area commencing successively from the Fukuroi City region.

Natural gas is a clean energy resource with an exceptionally stable supply that is used to help establish a low-carbon society to combat global environmental problems. This resource is in high demand from customers, especially in industrial fields, and its use is expected to continue to expand in the future.

By expanding use of natural gas and providing a stable supply, the three companies will continue to respond to the trust and expectations from local companies and customers as well as shareholders.

[Overview of new company]