Final Investment Decided on the World's First and Largest Offshore LNG Liquefaction Facility in the United States – Contributing to a Stable Energy Supply through Upstream Participation in the LNG Supply Chain.

(Mitsui O.S.K. Lines (Google translation)) Mitsui O.S.K. Lines, Ltd. (President: Jotaro Tamura, Headquarters: Minato-ku, Tokyo, hereinafter "the Company") has formally decided to invest in the United States' first floating liquefied natural gas (FLNG) project, together with Delfin Midstream, Inc. , the developer of the project, a group of investors including Global Infrastructure Partners (BlackRock, Inc. Group), the world's largest asset management company, and Vitol, one of the world's leading LNG trading companies. This project will be one of the world's largest FLNG projects with an annual LNG liquefaction capacity of 4.4 million tons, and is expected to begin production around 2030. The total project cost is approximately US$5 billion, with a total investment of approximately US$1.4 billion from the investors, of which the Company plans to invest approximately US$300 million (approximately 23% of the total investment). This marks the first time a Japanese shipping company has participated in an FLNG project.

Since investing in Delfin Midstream, Inc., the developer of this business, in 2023 (Note 1), we have supported their FLNG business development and conducted a feasibility study for this project. Now that the necessary conditions for realizing this project have been met, and the probability of business realization and profitability have increased, we have decided to make this investment.

This project has completed obtaining the necessary major permits and licenses, and has signed long-term sales agreements for the LNG to be liquefied in this project with Centrica, a major UK energy company; Expand Energy, a major US natural gas producer; and Vitol and Gunvor, two of the world's leading LNG trading companies. Following this investment decision, we have signed a construction contract for the FLNG with Samsung Heavy Industries Co., Ltd., and will move into the execution phase toward commencing production.

Our company will participate as an investor and support this project from the perspectives of offshore floating facilities, which we have cultivated through floating LNG storage and regasification units (FSRUs, Note 2), as well as from the operational and safety aspects of ship-to-ship cargo transfers and from financial aspects.

For transportation, natural gas is best liquefied from its gaseous state to LNG, which has a volume of approximately 1/600th of its original volume. Normally, this liquefaction takes place at onshore LNG liquefaction facilities, and then it is transported by LNG carriers. FLNG (Floating-Like Natural Gas) is a facility that liquefies natural gas at sea, and it has the advantage of minimizing the impact on surrounding local communities compared to onshore facilities. It also allows for flexible port entry and exit for LNG carriers by avoiding congested ship channels. Furthermore, a major advantage is that in the event of severe weather such as hurricanes, the mooring facilities can be detached and the vessel can be moved to a safe area, significantly reducing the risk of damage.

This project involves procuring raw gas in the continental United States and transporting it via existing pipelines to FLNG, located approximately 40 miles offshore from the southern coast of Louisiana. The transported gas will be liquefied into LNG at FLNG, loaded onto LNG carriers, and then delivered to the buyer.

This image illustrates the flow of gas from onshore gas fields through pipelines to FLNG, LNG carriers, and finally to the end consumer.

Leveraging the extensive knowledge and expertise cultivated through the operation of the world's largest LNG fleet, our company has expanded its business into the downstream areas of the LNG supply chain through FSRUs and power generation vessels. By participating in the FLNG business, we will further expand our vertical operations into the upstream areas closer to production, in addition to LNG transportation, receiving, and regasification, thus extending our LNG business to the entire value chain. Through this, we will evolve our business model to create value throughout the entire LNG supply chain, starting with the knowledge we have cultivated in LNG transportation, and further contribute to the diversification, stabilization, and decarbonization of global energy supply.

Leveraging the experience and expertise we have cultivated to date, our group will leap forward into a global social infrastructure company, supporting people's daily lives from the blue ocean, opening up a prosperous future, and delivering new value to all stakeholders.