China Open's First Natural Gas Spot Market

To cope with peak summer electricity use, China launches its first spot market for natural gas on the Shanghai Petroleum Exchange on Monday, reported Xinhua News Agency.

On Monday the transaction volume reached 39.6 million tons. China has adjusted domestic gas demand and supply via markets during the peak power period for the first time, Shanghai Petroleum Exchange's general manager Li Qingfeng said.

The debut of the natural gas exchange is a seasonal exchange that aims to more efficiently allocate natural gas resources and to meet rising demand in the summer, the agency said. "It is in accordance with the country's energy development strategy and energy liberalization," Xinhua said.

Companies including China National Petroleum Corp, the country's biggest oil producer, China National Offshore Oil Corp, Shenergy Group, based in Shanghai, and Xinjiang Guanghui Industry Investment Group Co injected 100 million cubic meters of natural gas into the platform for exchange until Sept 15.

The market watchers has taken this move as a further step toward liberalizing domestic natural gas prices after the central government debuted natural gas pricing reforms on a trial basis in southern China's Guangdong province and the Guangxi Zhuang autonomous region last December.