Japan to allow newcomers to make use of existing gas pipes

The Japanese government will oblige principle gas suppliers to let new market entrants access their pipelines as part of efforts to liberalize the gas retail market, sources in the Ministry of Economy, Trade and Industry said. The measure, expected to take effect in fiscal 2003, which ends in March 2004, is designed to let newcomers enter the market at relatively low costs by allowing them to make use of existing gas pipes on a commission basis.
Under the ministry's new policy, there will be no distinguishing between low-pressure pipes for small-lot users and high-pressure, long-distance ones for large users, a move that will make it easier to enter both the retail and wholesale gas markets, the sources said. Gas supply for large-lot users, who use at least 1 mm cm per year, has already been liberalized.

But some issues remain difficult, such as how to set commission fees at a level beneficial both to new entrants and existing suppliers, they said. The ministry has been trying to lure new entrants into the market to increase competition, lower gas charges and fully liberalize household gas supply.