The Japanese gas utility industry

This paper reports the Japanese gas utility industry which is composed of some 240 gas utilities of varying sizes, and the form of gas distribution between the three major gas companies and the other gas utilities are quite different. The three major gas companies distribute principally natural gas processed from imported LNG and their sales account for over 70 percent of all gas sold in Japan. The other utilities, smaller in scale, manufacture and market gas produced mainly from such feedstocks as naptha and LPG. Gas accounts for a relatively small share in the country's final energy consumption. The 3.1 percent market share has grown to 4.8 percent between 1976 and 1986. Japan's energy consumption is large in the industrial sector and small in the residential sector. The gas consumption, however, features the opposite situation, in which gas accounts for 15.7 percent in the residential sector, and only 1.9 percent in the industrial sector in 1986. This is one of the salient characteristics of the gas industry of the country as compared with Europe and the United States, where gas has a market share of 20 to 40 percent in both residential and industrial sectors. This paper presents and discusses reasons for the small share of natural gas in the Japanese market