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02.01.2018 13:43

China's Chongqing Gas Exchange Aims To Be Asia Price Benchmark

AUTHOR: publics.bg

© shannonpatrick17, flickr.com

China plans to launch a natural gas exchange in Chongqing in early 2018, aiming to create an Asian price benchmark as the nation’s use of the fuel surges amid its shift away from coal, Reuters reported.

China is the world’s third-biggest consumer of natural gas behind the United States and Russia. An exchange in its fast-growing market would be a strong contender for an Asian gas marker off which other supplies in the region could be priced.

The Chongqing Oil and Gas Exchange - supported by state energy majors, and private and local government-backed gas distributors - would provide a trading platform for domestic output, pipeline imports from Central Asia and Myanmar, and imports of liquefied natural gas (LNG). An Asian gas price benchmark to stand next to those of the United States and Europe is seen as a key missing piece in establishing a truly global market for natural gas.

“The exchange is a product of the government’s reform push - to hand the pricing power to the market,” said Exchange Chairman Zhang Bowen, cited by Reuters. “The long-term goal is to build the exchange into a benchmark for Asia and to win China its deserved pricing power,” said Zhang.

The exchange expects to launch electronically-based spot trading of pipeline gas and LNG imports in the first half of 2018. Chongqing exchange is appraising around 200 potential members, mostly from the consuming hub of Eastern China, and will be open to foreign participation in the longer run, said exchange executives.