China begins liberalising natural gas prices

China launched its first spot market for natural gas with an initial transaction volume of 39.6 million tons in July.

The spot market is located at the Shanghai Petroleum Exchange and had an initial transaction volume of 39.6 million tons on July 2. It is also expected to help China cope with peak summer electricity use.

It's the first time China has adjusted domestic gas demand and supply via markets during the peak power period, said Li Qing feng, Shanghai Petroleum Exchange general manager.

The natural gas spot market aims to more efficiently allocate natural gas resources and meet rising demand in the summer. It is also in accordance with China’s energy development strategy and energy liberalization.

China National Petroleum Corporation, China’s biggest oil producer, China National Offshore Oil Corporation, Shenergy Group and Xinjiang Guanghui Industry Investment Group injected 100 million cubic meters of natural gas into the platform for exchange until Sept 15.