Tokyo Electric Power Company Holdings (Tepco) will enter the city’s metropolitan gas retail market next July, it said, opening a new stage of competition with Japan’s biggest city gas operator Tokyo Gas.

Tepco Energy Partner Inc, Tepco’s retail unit, will work with gas operator Nippon Gas, which already has 320,000 city gas retail customers, to offer maintenance and other services.

The pair aim for about 500,000 customers by the end of March 2018, including Nippon Gas’ existing customers, and to boost that to one million by the end of March 2020, or about 10 per cent of Tokyo Gas’ customer base, a Tepco Energy Partner’s official told a news conference.

The move chimes with Japan’s plan for nationwide liberalisation of its 2.4 trillion yen ($20 billion) retail gas market in April 2017. Competition between utilities and gas operators was spurred in April when Japan’s $70 billion retail electricity market was opened up.

Under the latest agreement, Tepco will provide piped gas equivalent to about 275,000 tonne a year of liquefied natural gas (LNG) from next April to Nippon Gas which has been buying LNG from Tokyo Gas.

To counter the challenge, Tokyo Gas aims to further expand its market share in electricity, its president Michiaki Hirose told a separate news conference.