China's Shanghai gas exchange to launch LNG group purchasing by year-end (1)
China's Shanghai Petroleum and Natural Gas Exchange is aiming to introduce group purchasing services for liquefied natural gas (LNG) buy tenders on its trading platform this month, allowing purchases of smaller LNG portions by small and medium-sized buyers.
The exchange, which launched international LNG tender services in late October, said having a group purchasing option would cater to trading entities of different types and sizes.
The purchases would be managed by a group "leader" who must own an LNG terminal to receive shipment, be responsible for the shipment and risks and coordinate splitting the cargo with other smaller buyers who may not own terminals, said an exchange spokesperson.
Beyond LNG group purchasing, the Shanghai exchange is also aiming to launch new oil-related products such as petroleum coke as early as next week and bitumen, as well as LNG terminal window and transport capacity trading.
Apart from LNG and pipeline natural gas, the exchange is already trading petroleum, diesel and fuel oil. It saw natural gas trading volumes increase by over a third to 80.6 billion cubic meters in bilateral transactions in 2019 from the previous year, according to exchange data.
China, the world's second-largest importer of LNG after Japan, is aiming to create a benchmark price for Asian gas supplies via its natural gas trading exchange.
Demand for natural gas in China has increased in recent years amid government policies to switch from coal to gas in power generation to curb pollution.
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