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Enron to build Japanese power plant?

TOKYO—Enron Corp. is denying reports that it is considering building a coal-fired power plant in Fukuoka Prefecture on the western main island of Kyushu, Japan.

Enron International spokesman John Ambler said the company is not “specifically looking at a coal-fired plant,” although the Houston company is examining various options in Japan, including possibly building new generation.

“We will have a better sense of our strategy over the next several months, especially with respect to new generation,” he said. Construction of a new power plant would be one of several ways for the US energy company to win a share of the country’s now partially liberalized electricity market.

If it received approval, Enron would be the first foreign entry in the Japanese power market, Japanese reports said. Reuters new agency quoted a source close to Enron’s business in Japan as saying various plans for power sources across the country are being worked on, including a coal-fired plant, and Kyushu is among the candidates, although nothing has been finalized yet.

Last year Enron set up its first Japanese venture, E Power, in conjunction with leasing company Orix Corp as a way to enter the country’s electricity market. Enron has a 20% stake in the venture.

Ambler said E Power is also looking at ways to gain access to existing generation.

In May Enron also set up a Japanese subsidiary called Enron Japan KK, which seeks other opportunities than electricity supply in Japan, mainly through its fast-growing Internet-based energy and other commodities marketplace EnronOnline. Among products to be offered will be weather derivatives.

Nonutility firms have been allowed to retail power industrial and other large business customers since March. The liberalization was aimed at introducing competition to cut Japan’s electricity rates, which have been criticized as high compared with other industrial nations.

A number of other foreign energy concerns, including Texaco and RoyalDutch/Shell, as well as several domestic trading houses been interested in entering Japan’s newly deregulated power sector.