China plans to launch a natural gas exchange in Southwest China's Chongqing Municipality 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.
China is the world's third-biggest consumer of natural gas behind the US 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 - hopes to provide a trading platform for domestic output, pipeline imports from Central Asia and Myanmar, and imports of liquefied natural gas (LNG).
Chongqing's move is China's second attempt to develop a traded gas market, having set up a similar exchange in 2015 in Shanghai.
An Asian gas price benchmark to stand next to those of the US 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 the exchange's chairman, Zhang Bowen.
"The long-term goal is to build the exchange into a benchmark for Asia and to win China its deserved pricing power," said Zhang, who was previously president of PetroChina Kunlun Energy.
The exchange, led by a board of nine directors including a former PetroChina executive and an ex-senior state planning official, expects to launch electronically based spot trading of pipeline gas and LNG imports in the first half of 2019.
Courtesy of Global Times, edited for style