![]() The company plans to sell natural gas within a 150-km radius of Himeji and aims to sell tens of thousands of tonnes of gas in 2005, accounting for about 10% of total gas demand in the area. Kansai Electric and Iwatani will build a large LNG storage and regasification center at Sakai, Osaka prefecture, in 2005 to distribute gas to surrounding areas, as well as a new storage terminal at Kansai Electric's LNG base in Himeji, Hyogo Prefecture. The new company, eL ENERGY Co., will be capitalized at �150 million, 51% of which will be put up by Iwatani. This will be the first time a Japanese power utility has operated a gas supply business, a direct response to intense market competition in the power sector. Inc., for example, is setting up an LNG sales firm with trader Iwatani International Corp. Japan's second largest utility, Kansai Electric Power Co. Rather, they are turning the tables on gas suppliers by diversifying into the natural gas business. Japan's largest utility, Tokyo Electric Power Co., for example, says its revenue could decrease by as much as $75million/year if just one fifth of its industrial base chooses an alternative supplier.īut power companies are not taking the potential encroachment lying down. The impact these new players will have on the incumbent electric utilities could be dramatic. and Osaka Gas Co.�have also said they plan to enter the retail power business. Additionally, the country's two biggest gas suppliers�Tokyo Gas Co. Other foreign firms eyeing Japan's power sector include Royal/Dutch Shell, Texaco Inc., and Vivendi SA.ĭomestic companies that have expressed an interest in the power sector include Mitsubishi Corp, Marubeni Corp., Sony Corp., Tonen Corp., and Nippon Telegraph & Telephone Corp. Chairman Kenneth Lay said the company expects to start electricity trading in Japan within 3 months, assuming regulatory changes are implemented.īut Enron is not the only foreign company pursuing the Japanese power market. said in January that it will buy a 20% stake in E Power for $30 million to tap into the retail power supply business. Enron Japan will complement Enron's other interests in the industrial power sector, which it is pursuing through its E Power affiliate, established last August, the company said. This is the second stage of a deregulation plan�aimed at reducing Japan's relatively high electricity prices�that began in 1995 when nonpower companies were allowed to sell electricity to the 10 utilities.Įnron executives say Enron Japan KK will focus on merchant activities such as finance, risk management, commodity market-making, and electronic commerce. ![]() The size of the market now open to competitors is about 292 billion kw-hr. The 8,000 high-volume industrial and commercial users represent roughly 27% of total Japanese power demand. 21, Japan's 10 regional power firms have been competing with each other, and with nonpower companies, to supply electricity to large-lot customers, a market estimated to be worth an annual �3 trillion. has set up a wholly-owned subsidiary in Tokyo to penetrate Japan's energy and financial sectors.Įnron's move comes as a number of foreign and domestic companies consider entering Japan's electricity market, which was partially liberalized in March when the supply monopoly by the nation's 10 regional electric utilities ended. In the latest move, US energy giant Enron Corp. TOKYO�Japan's recently deregulated power and gas sectors are beginning to feel the effects of stiff competition from newcomers.
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