Trial operations are underway for China's newest commodities exchange online.
The Shanghai Petroleum and Natural Gas Exchange is a joint collaboration among 10 state-owned energy giants, including the China National Petroleum Corporation and China National Offshore Oil Corporation.
The exchange, with the acronym SHPGX, is expected to handle futures contracts covering around 10-billion cubic meters of natural gas per year by next year.
Guo Xu, director of the platform, says it will allow companies to avoid government interference in pricing and sales.
"The SHPGX aims to be an excellent natural gas distribution hub like the Henry Hub in the U.S. and the National Balancing Point in the UK. It will be built as a platform of information, finance and trade which allows the spot exchange of petroleum and natural gas."
During the current testing period, the exchange will only handle natural gas transactions for pipeline natural gas and liquefied natural gas.
Its establishment comes on the heels of Chinese regulators announcing plans for oil futures trading in Shanghai.
Authorities are suggesting oil trading on the Shanghai Futures Exchange might be up and running by the end of the 3rd quarter.
