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The Tokyo Electric Power Co. plans to enter natural gas wholesaling in fiscal 2004 by leasing pipelines owned by Tokyo Gas Co., Tepco sources said Monday.

Currently, there are 16 small and midsize gas retailers in the Kanto region that count on Tokyo Gas, the sources said, adding that Tepco wants to make some of them its own clients.

Because the pipelines of retailers other than Otaki Gas and Keiyo Gas, both in Chiba Prefecture, are not connected to its wholesale pipelines, Tepco plans to use Tokyo Gas pipelines on the assumption that a bill to enable access by rival wholesalers clears the Diet and goes into effect in April 2004, according to the sources.

The Diet is expected to pass the bill during its current session. It is aimed at spurring competition and cutting costs for retailers and consumers.

Since retailers in the Kanto region can currently only buy from Tokyo Gas, their costs tend to go up, especially during winter, when consumption by households, factories and offices increases.

The volume of gas these retailers buy from Tokyo Gas tends to top a threshold under which retailers are entitled to relatively inexpensive basic fees.

Tepco will wage a marketing campaign targeting the retailers by saying a diversification of suppliers will enable them to cut costs during periods of strong demand, they said.

On a wholesale basis, Tepco’s gas division currently sells only to Otaki Gas, which is based in Mobara, Chiba Prefecture.

The division hopes to also start selling gas on a wholesale basis to Keiyo Gas, a retailer based in Ichikawa, Chiba Prefecture, in 2006.

Until then, Tepco will install equipment to mix natural gas and liquefied petroleum gas, so the “heat quantity” of the gas that supplies can be adjusted to 11,000 calories per cu. meter.

Because Tepco plans to send gas to retailers via Tokyo Gas pipelines, the heat quantity of its product must be adjusted to the same level as that of Tokyo Gas, they said.

At present, Tepco has gas-supply contracts with four companies, including Otaki Gas and Keiyo Gas. The contracts call for Tepco to sell a combined 150,000 tons a year.

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