Nippon to Construct Hachinohe LNG Terminal in Japan

Nippon has made a final decision to construct an LNG importing terminal (hereinafter "Hachinohe LNG Terminal") in Port Island, Kawaragi District, Port of Hachinohe, Aomori, Japan (hereinafter "Port Island").

Nippon has supplied natural gas and LNG in the northern part of the Tohoku region (Aomori, Iwate and Akita Prefectures) since March 2007 when the existing Hachinohe LNG Satellite Terminal was completed. The new terminal will be built in order to comply with the demand growth particularly in industrial sector and to expand the company's supply areas. Nippon will begin the construction work during FY 2010 and aims to start the operation in April 2015.

In line with the above, Nippon entered into a Heads of Agreement (HOA) for the Sale and Purchase of LNG with the Australian subsidiaries of Chevron Corporation pertaining to the purchase of 300,000 tons per annum of LNG to be imported at Hachinohe LNG Terminal. The LNG will be produced from the Gorgon Project which Chevron has been developing in Western Australia as an operator. Nippon will continue discussion with Chevron to conclude a contract for this transaction.

In addition, Nippon has initiated studies with Hokkaido Gas Co., Ltd, on the construction of a new LNG satellite terminal in Kushiro City, the eastern part of Hokkaido. The objective of this plan is to meet the natural gas and LNG demand which is expected in this area. LNG supply to the satellite terminal will be made by coastal tanker from the Hachinohe LNG Terminal or Hokkaido gas' new Ishikari Terminal which is currently under construction.

As a comprehensive energy supplier, Nippon Oil Corporation will continue its endeavor to contribute in promoting further utilization of environmentally-friendly natural gas and LNG, and also undertaking regional development initiatives.