Mitsui Engineering & Shipbuilding Co. said Monday it has developed what it claims is the world's most efficient 1,000-kilowatt gas engine.

Mitsui Engineering said it will begin taking orders this month for the engine, which has a power generation efficiency of 42.5 percent and is designed to be used in private power generation systems in midsize and small buildings such as hospitals or small factories.

The announcement came amid intensifying competition among Japanese heavy machinery manufactures in the field of cogeneration -- producing more than two forms of energy from one source of fuel, such as converting waste heat into a source of hot water supply.

Mitsui Engineering said natural gas will be used as fuel for the new engine to help minimize toxic emissions.