Mitsui to Integrate its LPG Business

Source: www.gulfoilandgas.com 12/24/2010, Location: Asia

Mitsui & Co., Ltd. (Mitsui) announced that JX Nippon Oil & Energy Corporation (NOE, a wholly owned subsidiary of JX Holdings, Inc.) and Mitsui Marubeni Liquefied Gas Co., Ltd. (MLG, a joint-venture between Mitsui and Marubeni Corporation (Marubeni), owned 60% by Mitsui and 40% by Marubeni) have signed an agreement on an "absorption-type split" (kyushu bunkatsu) to integrate the liquefied petroleum gas (LPG) business of MLG and NOE's LPG business unit (Integration) and establish an integrated company (Newco) as of March 1, 2011, following an agreement on the Integration between the parties as previously announced on August 3, 2010.
The Integration is subject to review by the relevant regulatory and governmental authorities.

1. Purpose of the Integration

The purpose of the Integration is to strengthen the respective competitiveness and profitability of LPG business through rationalizing the whole supply chain. The Newco will aim to be an energy company which meets customers' needs, fulfilling its responsibility to become a more efficient and stable LPG supplier and focusing positively on new energy business, such as sales of fuel cells, by utilizing its nationwide sales networks for the supply of LPG.

2. Outline of the Integration

1) Method of the Integration
The Integration units are NOE's LPG business (NOE's carved-out LPG business) and MLG. The Newco will be established based on an "absorption-type split" (kyushu bunkatsu) through which MLG, as the successor company, will acquire NOE's carved-out LPG business. Furthermore, NOE will carve out its assets necessary for Newco to operate its LPG business.

NOE's carved-out LPG business does not include NOE's LPG business which used to be carried out by the former Japan Energy Corporation or its affiliates, as well as NOE's business in propylene, intermediate products of oil refining process, etc. The main assets of NOE's carved-out LPG business are as follows:
(1) Facilities and land for terminals and LPG filling stations in Niigata, Akita and Sendai (Kagoshima Pref.) Terminal.
(2) Facilities and land related to LPG business in Sendai (Miyagi Pref.), Kawasaki and Osaka Terminal.
(3) Shares of KYUSHU L.P.G. FUKUSHIMA TERMINAL COMPANY, LIMITED and Onahama LPG Terminal.
(4) Shares of six LPG sales subsidiaries owned by ENEOS FRONTIER CO., LIMITED, a wholly owned subsidiary of NOE.

2) Date of Integration: March 1, 2011


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