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Kobe Steel, Tokyo Gas conclude power supply agreement

September 29, 2014

Kobe Steel, Ltd. and Tokyo Gas Co., Ltd. today concluded an agreement for Kobe Steel to supply all the electricity generated by its gas-fired power station to be constructed in Moka, Tochigi Prefecture, Japan, to Tokyo Gas. The two companies had earlier entered into a memorandum of understanding for the power supply arrangement. When environmental impact assessment procedures, which began in March 2013, are completed, Kobe Steel will begin construction of the power station.

As originally planned, the power station will be constructed adjacent to Kobe Steel’s Moka Plant at the Moka No. 5 Industrial Park. The power station will have two 600,000 kW-class gas turbine combined cycle (GTCC) plants that together will provide a power generation capacity of approximately 1.2 million kW. Following completion of the environmental impact assessment, construction is anticipated to begin as early as mid-2016. The No. 1 Power Plant is expected to start up in the latter half of 2019, and the No. 2 Power Plant in the first half of 2020. The electricity will be supplied to Tokyo Gas for a period of 15 years after the start of operations.

The power station will use city gas from a gas line called the Ibaraki-Tochigi Line, which will run from Hitachi in Ibaraki Prefecture to Moka. Currently under construction by Tokyo Gas, the gas line is anticipated to be completed in fiscal 2015.

The state-of-the-art GTCC plants at Moka will have Japan’s highest level of energy efficiency. The Moka facility will be Japan’s first full-scale thermal power station located inland. This project is envisaged to contribute to society’s need for a stronger energy infrastructure by dispersing power generation, as well as bolstering regional economic development.

Through its steel business, Kobe Steel has accumulated over half a century of know-how in operating in-house power generation facilities. At its Kakogawa Works in Kakogawa, Hyogo Prefecture, Kobe Steel is currently building GTCC power plants that use blast-furnace gas as fuel to improve energy efficiency. At its Kobe Works in Kobe, Hyogo Prefecture, Kobe Steel constructed a coal-fired power station with a power generation capacity of 1.4 million kW. Kobe Steel has been supplying The Kansai Electric Power Co., Inc. with electricity since 2002 as a wholesale power business, contributing to the stable supply of electricity in Kobe.

Making use of this know-how, the Moka power station is one project that will expand Kobe Steel’s power supply business and contribute to building a stable profit base under the company’s Fiscal 2013-2015 Medium-Term Business Plan launched in May 2013. Steadily carrying out the environmental impact assessment, Kobe Steel is fully committed to moving this project forward according to plan.