SHANGHAI, Nov. 26 (Xinhua) -- Shanghai Petroleum and Natural Gas Exchange (SHPGX), a national energy trading center, officially opened for business on Saturday, a step further toward China's market-oriented reform of energy.
Xu Shaoshi, chairman of the National Development and Reform Commission, said that the platform is both an important achievement of China's market reform of oil and gas prices, and strong support for further reforms.
Since its test run, SHPGX has played an important role in connecting suppliers and buyers so as to form rational energy prices, Xu said.
The center was established in March 2015, with ten stakeholders, including Sinopec, CNPC and CNOOC. Trial operations started in July 2015. It is estimated that gas transactions at the center will exceed 15 billion cubic meters this year, accounting for about 8 percent of China's total natural gas consumption.
Mayor of Shanghai Yang Xiong noted that the new center would expand Shanghai's influence in the natural resources market.
China is experiencing profound changes in energy consumption pattern. The market share of clean and efficient natural gas is climbing rapidly.
Experts said the launch of SHPGX will help to accelerate the natural gas price reform by forming reasonable prices and promoting smooth allocation of the resource.
PetroChina chairman Wang Yilin said as a just, fair and open platform, SHPGX faithfully reflects natural gas consumption based on seasonal and regional differences, so as to reveal its true value and stabilize the market.
PetroChina will continue to expand its trading volume on the platform and fully support the natural gas futures business of SHPGX that is under preparations, Wang said.
"China needs such a petrol and gas trading center to press forward the market reform of energy," said Wang Yupu, chairman of Sinopec, adding SHPGX will get full cooperation from Sinopec in its development.
According to Yang Hua, chairman of CNOOC, the company traded a total 2.03 billion cubic meters of natural gas at the center last year, and another 2.44 billion as of Oct. 31 this year, overfulfilling the promissory trading target as a shareholder of SHPGX.
"The key to China's market reform of energy is to open both the industry and the market," said Jing Chunmei, a research fellow with the China Center for International Economic Exchanges.
"The industry concentration of oil and gas is high in China, and their prices are mainly guided by the government. SHPGX would upgrade the pricing mechanism by establishing a fair petrol and natural gas spot market," Jing said.
The China Economic Information Service (CEIS), a subsidiary of Xinhua News Agency, is also a stakeholder of the center. Xinhua President Cai Mingzhao said that CEIS will get up-to-the-minute petrol and gas trading information from the center and provide professional information products, assisting development of the resource market in China.
The center will conduct both listed transactions and competitive price transactions for natural gas, liquefied natural gas, petrol and other resource products. It plans to have mid- and long-term spot transactions and financial derivative trading in the future. Enditem