Texaco and Koa Oil have agreed to make a joint foray into the wholesale electric power industry in Japan.

They plan to construct and operate generating plants to sell electricity wholesale to electric power companies, and eventually direct to industrial consumers. The Texaco-Koa Oil alliance marks the first attempt by a foreign company to break into Japan’s electricity market since a 1996 deregulatory measure allowing non-utilities to set up in power generation. They will first sell power to Kansai Electric and Chugoku Electric in 2000.

Texaco and Koa Oil plan to build two 500 MWe plants, one in Osaka Prefecture and one in Yamaguchi Prefecture. The plants are due to be operational in 2003.