TOKYO -- Tokyo Electric Power Co. Holdings and JXTG Holdings will team up to build a power plant and production facilities for city gas, using each other's expertise to more effectively tap markets outside their traditional turf.
Japan's top electricity provider and oil company, respectively, will build a natural-gas-fired power plant in the city of Kawasaki. They aim to bring the 1.3-million-kilowatt facility online around 2024.
A 50-50 joint venture will be set up as early as October for the roughly 120 billion yen ($1.08 billion) project. By working with JXTG, Tepco seeks to build a cost-competitive plant with cutting-edge technology while limiting its financial burden.
For JXTG, having more power plants of its own will help the energy giant further expand its presence in the retail electricity market, which was opened up to new players last year. The company already operates an 850,000kW gas-fired plant in Kawasaki with Tokyo Gas, but decided in July not to boost its capacity to 2 million kilowatts by 2021 as previously planned.
Tepco and JXTG will also jointly build facilities to process liquefied natural gas into city gas. The two companies will form a separate joint venture for this project. The facilities are expected to begin operating around 2020.
Japan liberalized its retail city gas market in April. Tokyo Gas still holds a near-monopoly in the greater Tokyo area.