EL RECURSO AGUA Presenta las siguientes características:

Pertamina (Indonesia), Petronas (Malaysia), Brunei LNG, Abu Dhabi Gas Liquefaction, Qatar LNG, Oman LNG, Darwin LNG (East Timor),

Phillips Alaska Natural Gas (United States), Marathon Oil (United States), BP Development Australia, Chevron Australia, Shell Development Australia,

Woodside Petroleum (Australia), Japan Australia LNG

Major Owners and Operators of LNG Terminals and Transmission Pipelines in Japan

Regional Gas Utilities:

Tokyo Gas Company, Toho Gas Company, Osaka Gas Company, Saibu Gas Company

Regional Electric Utilities:

Tokyo Electric Power Company, Chubu Electric Power Company, Kansai Electric Power Company, Kyushu Electric Power Company, Tohoku Electric Power Company, Chugoku Electric Power Company

Additional Owners and Operators of LNG Terminals in Japan

Joint Enterprises of Gas Utilities, Electric Utilities, Municipalities, Steel Companies:

Higashi-Niigata, Shimizu, Chita-LNG, Oita, Tobata

Additional Owners and Operators of Gas Transmission Pipelines in Japan

Domestic Gas Developers:

JAPEX (Japan Petroleum Exploration Company), Teikoku Oil Company

Owners and Operators of Gas Distribution Pipelines in Japan

Regional Gas Utilities:

Tokyo Gas Company, Toho Gas Company Osaka Gas Company, Saibu Gas Company

Local Distribution Utilities:

About 234 independent companies (62 municipal and 172 private)

GAS MA R K E T RE F O R M GAS MARKET SKETCHES: JA P A N

UNBUNDLING AND THIRD PARTY ACCESS

In the Japanese gas market, production is almost entirely unbundled from transport. This is not the case for domestic gas producers (JAPEX and Teikoku), which also own gas pipelines, but domestic production supplies only a few percent of the overall gas market. The bulk of production is provided by competing suppliers abroad, while the bulk of transport is provided by the Japanese gas and electric utilities and utility-municipal-steel consortia.

In addition, long-distance transmission of gas in Japan is partially unbundled from local distribution. The regional gas utilities own and operate gas distribution networks in addition to gas transmission pipelines and LNG facilities, in some case through local distribution affiliates. But there are also some 240 independent gas distribution companies that do not have any long-distance transmission function. The regional gas utilities provide transportation services to other entities that can procure natural gas, and it is foreseen that additional gas companies will be requested to provide transportation services and file transportation tariffs. However, there is not strict unbundling of accounts between transmission and distribution functions in these utilities.

Within the gas transmission function, there is very limited unbundling of LNG facilities and gas pipelines. It is true that the utility-municipal-steel consortia own only LNG facilities, while domestic gas developers own only pipelines. But the regional gas utilities and the regional electric utilities operate both LNG facilities and pipelines, and these utilities account for most gas transport.

With respect to gas pipelines owned by major gas utilities, there is regulated third-party access for competing gas suppliers and large gas customers. The 1995 amendments to the gas and electric industry laws required the gas utilities to allow pipeline access to competing suppliers on non- discriminatory terms. The 1995 amendments also made gas customers using more than 2 million cubic meters (92 terajoules) per annum eligible to choose their supplier. The 1999 amendments to the gas and electric industry laws further extended pipeline access to large volume customers using over 1 million cubic meters (46 terajoules) of gas per annum. The 1999 amendments also required the four large gas utilities to disclose rulebooks for retail third-party access, putting competing suppliers in a better position to negotiate contracts.90

However, with respect to the bulk of the gas transport system in Japan, provisions for third- party access have been absent. This is most evident in the case of LNG facilities, which are legally considered analogous to private factories. The gas and electric utilities that own and operate LNG facilities are not obliged to allow the use of such facilities by competitors. Gas pipelines other than those owned by the four major gas utilities are not required to provide access to competitors either.

Looking forward, there are signs that third-party access to gas transportation services in Japan may be expanded. The Forum on Gas Market Reform, organised by the Ministry of Economy, Trade and Industry (METI), recommended in April 2002 that owners of LNG facilities who intend to enter the gas market make public the amount of capacity at such facilities that is not being utilised, that they negotiate for use of such capacity by third parties, and that they inform third parties of the reasons that access to spare capacity is denied, if that is the case. The Forum also recommended that access to natural gas pipelines be extended to all customers, rather than just large industrial and utility customers, and that access be provided to all pipelines, rather than just those owned by gas companies. The Urban Heat Energy Subcommittee of METI’s Advisory Committee for Natural Resources and Energy took these proposals under consideration in September 2002 and endorsed them in February 2003. The Diet then incorporated them in an amended Gas Utility Industry Law in June 2003. If they are fully implemented, Japan will have negotiated third-party access for LNG facilities and regulated third-party access for gas pipelines.91

The Urban Heat Energy Subcommittee also laid out a specific timetable for expanding choice of gas suppliers in the retail market. It recommended that retail choice be introduced for industrial and commercial firms with an annual demand of 500,000 cubic metres or more in about 2004 and

90 _{Institute of Energy Economics, Japan (2002b).}

for firms with an annual demand of 100,000 cubic metres or more in about 2007. This would expand the scope of the liberalised market from 40 to 50 percent of gas demand for the ten largest gas utilities (which account for 85 percent of overall gas demand). The amended Gas Utility Industry Law adopted by the Diet in June 2003 in fact advances the date for completing this expansion of the competitive market to April 2005. For household and small commercial users with lower demand, the Subcommittee recommended that a decision on retail choice be made in light of the results of retail liberalisation for larger customers and in other energy sectors.92

MARKET MODEL AND COM P E T I T I O N

Japan’s gas market would seem to fit most closely the wholesale competition model. However, instead of one principal wholesale buyer of gas in each region, there are two: the franchised gas utility and the franchised electric utility. In practice, the market in each area is split between the two buyers mainly according to end use, with electric utilities buying gas to fuel their gas-fired power plants and gas utilities buying gas to serve industrial, commercial and residential customers. There is substantial wholesale competition, as both gas and electric utilities buy gas from competing foreign suppliers through their LNG facilities.

Figure 43 Regional Markets for Gas and Electricity in Japan

92 _{METI Gas Market Division (2003). Government of Japan (2003).}

¦ Kanto

¦ Chubu