Dear Shareholders,

For over a quarter of a century, KOREA GAS CORPORATION continues to provide clean and safe energy through your unyielding support, expanding our reach not only to the ends of the Korean Peninsula but to the world as well. On behalf of the KOGAS Family, I would like to extend my warm wishes and sincere appreciation to all of you.

The unprecedented global economic crisis has sparked a number of challenges last year. Decrease in sales of Natural Gas for power generation and inflation concerns led by the government were inevitable. However, we, through ceaseless efforts, managed to transform this crisis into a turning point where we build new growth engines for the future, treading the new path to become a global energy company. As a foundation in realizing such efforts, KOGAS celebrated one of the most outstanding achievements in the area of overseas resource development since the establishment of the Korean Government when we have successfully won the bid to develop an Iraqi oil field.

Looking at our 2009 business performance, amidst the world's challenging economic situation, KOGAS recorded sales of 24.6 million tons of natural gas and our revenue was 19.39 trillion won, having a net profit of 238 billion won. Eventhough the gearing ratio increased significantly due to the policy of curbing the city gas tariff, because we have put up a plan to recover the accounts receivable fully over the next 3 years. TSurely, the fiscal status of KOGAS including the debt ratio and capital requirements will improve sooner than expected.

Though we anticipate that the economic climate around the globe is likely to improve gradually this year, uncertainties in the overall economy still remain and competition among countries to secure energy sources is likely to intensify. Rest assured that KOGAS will do its best to wisely overcome such challenges achieving strong growth through the following strategic steps.

First, we will position ourselves as an undisputed global energy company in virtue of actively carrying out upstream gas resource development projects in the Middle East, Africa, Asia, Australia, and North, Central and South America. In addition, by the end of this year, the Corporation will finalize the method of importing Russian natural gas, and make inroads into the downstream business by participating in a pipeline network project and pursuing a city gas project in Vladivostok. These efforts will allow KOGAS to build a vertically integrated gas business structure from the upstream to the downstream natural gas sectors.

Second, we will pursue the diversification of our operations to accelerate growth in our core and new businesses. By securing the right to develop the Iraqi oil field, we made our debut into the oil field business. Also, we will diversify import sources by carrying out projects in Australia, Canada, Ukraine, Indonesia, and Mongolia that utilize unconventional gas such as coal seam and shale gas, while we continue to aggressively broaden our connections as a comprehensive energy company.

Third, we will intensively nurture creative and competent organizations and human resources capable of conducting global business with passion. Not only do we need to ensure a stable domestic supply of natural gas, but we also need to compete with other countries' talented individuals in various areas such as resource development project, plant export, overseas pipeline construction, overseas city gas business, and LNG base construction business. In this dynamic arena, KOGAS will equip itself with a competitive system that allows participation of all employees, making steady efforts to develop human resources for greater effectiveness.

Standing firm on the verge of a new Era of Global Energy, KOGAS remains committed to our mission in order to contribute to the national economy and raise corporate value based on creative ideas and commitment, and share the fruits of such efforts with our shareholders. We will always be ready to listen to you and envisage higher efficiency of our organization through fair and transparent ethics management. Furthermore, we have instilled the importance of balance between labor and management, establishing harmonious labor-management relations hand in hand in pursuit of higher productivity.

This year is a crucial period for KOGAS to position itself as a global energy company. Hence, we will spare no efforts to maximize shareholder values based on the mutual trust and confidence. We hope for your continued interest and support.

Thank you.