NKK News Release : October 10, 2001

--Seeks to commercialize DME, a directly synthesized source of plentiful, cheap, clean energy--

A consortium of eight companies has reached an agreement to jointly establish a dimethyl ether (DME) production and sales commercialization research company. The partners in the consortium are NKK Corporation, Toyota Tsusho Corporation, Hitachi, Ltd., TotalFinaElf, Marubeni Corporation, Idemitsu Kosan Co., Ltd., INPEX Corporation and Nippon Sanso Corporation. The new company, DME International Corporation, to be established on October 19, will study DME production using direct synthesis techniques.

The demand for energy is rising, driven by surges in population and economic growth around the world and especially in Asia. This has given rise to expectations of increasingly serious energy shortages and environmental issues in the 21st century, and the development of stable energy supplies and the reduction of environmental load are therefore among the most pressing issues before us.

DME is a clean energy source that can be manufactured from a wide variety of hydrocarbon materials. DME has very little environmental load because it generates absolutely no sulfur oxides or particulate matter during combustion.

DME is also non-toxic and extremely easy to handle, giving it wide applications in areas currently served by commercial home fuels (as an alternative to LPG), transportation fuels (as an alternative to diesel automobile fuel and as a fuel for fuel cells), and also applications as a generator fuel (in thermal power plants and as a fuel for fuel cells) and as a source of hydrogen energy. The latent market for DME in Asia alone as a replacement for LPG and as a generator fuel is estimated at approximately 100 million tons a year by 2010 (NKK survey in fiscal 2000). There are thus high hopes for its commercialization as a new generation of alternative energy.

NKK, backed by the Agency of Natural Resources and Energy under the Ministry of Economy, Trade and Industry (METI) of Japan, has led an ongoing, collaborative effort to establish direct synthesis technology for the low-cost mass-production of DME. There are two other groups around the world developing direct synthesis techniques for DME, but the NKK-led team's technique has achieved worldwide acclaim for its efficiency and for the high levels of progress that it has achieved.

This direct synthesis technique makes it possible to effectively utilize the untapped reserves of low-grade coal and the smaller gas fields that are scattered throughout the Asian region. As a new form of energy with very little constraint on the resource side, DME offers a global-scale promise of energy security and low environmental load.

The research company was organized in conjunction with the move to the conceptual design phase for a demonstration plant aimed at commercializing DME direct synthesis technology. It will focus on marketing activities and will begin to develop markets for DME so that commercial DME operations can get under way as quickly as possible after technology development is completed. The company has a target of fiscal 2006 for the start up of DME supplies. The final size of the operation will be determined from future feasibility studies, but is estimated at between 800,000 and 1.5 million tons per year.

The research company includes many leading Japanese firms, NKK, Toyota Tsusho, Hitachi, Marubeni, Idemitsu Kosan, INPEX, and Nippon Sanso, from a wide range of industries, together with TotalFinaElf, one of the leading companies in the oil industry. It will be a significant force and bringing DME to a worldwide market.

Profile of new DME commercialization research company:

1. Name:	DME International Corporation
2. Address:	1-1-2 Marunouchi, Chiyoda-ku, Tokyo (within the NKK head office)
3. Establishment:	October 19, 2001 (tentative)
4. Capital:	¥100 million
5. Investment shares:	NKK Corporation	34%
	Toyota Tsusho Corporation	17%
	Hitachi, Ltd.	17%
	TotalFinaElf	7%
	Marubeni Corporation	7%
	Idemitsu Kosan Co., Ltd.	7%
	INPEX Corporation	7%
	Nippon Sanso Corporation	4%
6. President:	Mikito Wakamatsu, Vice President and Director, Environmental Solutions Center, NKK Corp.
7. Directors:	Teruhiro Isayama, Manager, Planning and Marketing, Environmental Solutions Center, NKK Corp.
	Kimio Yamamoto, General Manager, Energy Department, Toyota Tsusho Corp.
	Masaki Suzuki, Department Manager, Business Development Department, Planning & Management Division, Thermal & Hydroelectric Systems Division, Power & Industrial Systems Group, Hitachi, Ltd.
	Hubert de Mestier, Chief Representative for North-East Asia, TotalFinaElf
	Ryoji Yamauchi, General Manager, Business Development Sec. Assist. General Manager, Energy Planning & Coordination Department, Marubeni Corp.
	Setsuo Hidaka, Asst. to the General Manager, Corporate Planning Department, Idemitsu Kosan Co., Ltd.
	Atsushi Sakamoto, General Manager, Development Department, INPEX Corp.
	Toshiyuki Wako, General Manager, On-Site & Plant Sales Division, Nippon Sanso Corp.
8. Businesses:	1) Marketing 2) Business plan formulation 3) Financial plan research

[ Profile of Investors ]

DME Commercialization Research Company Established