The joint venture is between Amoco, the Chicago-based energy group that produces, transports and processes natural gas in the UK, and Seeboard, one of the regional electricity companies.
"We're talking about competition taking over from regulation," said Seeboard's managing director of supply, Stephen Gutteridge, who added that he hoped the joint venture would reach a 10 per cent share of the domestic market, or two million gas consumers, within five years of the UK market being open to competitive supply.
Each company will take a 50 per cent shareholding, with initial equity totalling between pounds 5m and pounds 10m.
Amoco claims to be the largest owner and producer of gas reserves in the US and Seeboard serves nearly two million customers in the south-east of England.
Competition in the supply of gas is being phased in over a period of time through a series of deregulatory measures. Only the market for supply of gas to commercial premises and the largest of domestic consumers is open to competition.
The entire gas market in the UK will be open to competitive supply from 1998.
"We're hoping to build a strong business quickly from a low cost base," Mr Gutteridge said.Reuse content