Yokohama, Japan - JGC Corporation announces that ongoing negotiations between JGC and its client on the engineering, procurement and construction contract for a large-scale gas processing plant (valued at approximately 250 billion yen) have yet to reach agreement as of the end of fiscal 2006 (March 31, 2007). Negotiations are continuing.

As a result, we expect consolidated contracts received in fiscal 2006 to be approximately 300 billion yen (the projection made at the beginning of the fiscal year was 440 billion yen). The figure for consolidated contracts received for fiscal 2005 was over 800 billion yen, making the average for fiscal years 2005 and 2006 approximately 550 billion yen.

Figures for large-scale projects are posted over several years from receipt of contract to completion using the percentage-of-completion method. Thus, the delay in award of the contract for the project mentioned above will have minimal impact on the sales performance for fiscal year 2007.