China's first national oil and natural gas trading center is playing a major role in helping to accelerate reform of China's energy market and further promote a market-based pricing system for energy products, said a leading oil industry executive.
"The center has been vital in linking supply and demand, and formulating market-oriented prices since its trial operations started in July 2015," said Wang Yupu, chairman of the board of directors of Sinopec Corp.
"The market has been playing an increasingly obvious part in energy pricing, and Sinopec will further participate to help boost the trading scale and optimize its trading structure, perfect the energy pricing mechanism in China and more actively merge into the international market system," Wang added.
Opened for business in Shanghai on Saturday after more than 12 months of trial operations, the Shanghai Oil and Natural Gas Trading Center now has 10 stakeholders including Sinopec, China National Petroleum Corporation, and China National Offshore Oil Corporation.
"China's reform of energy pricing has made significant progress, with up to 80 percent of natural gas prices now mainly decided through market players," said Xu Shaoshi, director of the National Development and Reform Commission. "With the expanding scope of market activities, the Shanghai center will help speed up the market reform of energy products."
The center, founded by Xinhua News Agency and the National Development and Reform Commission, with registered capital of 1 billion yuan ($144.56 million), aims to become Asia's main trading and pricing hub within the next five years.
It expects to trade more than 15 billion cubic meters of natural gas by the end of this year, which is also some 8 percent of China's total consumption, Xu said at a ceremony on Saturday.