China on Saturday formally launched a state-backed commodity trading center in Shanghai, as the world’s top energy consumer looks to race ahead of other countries such as Tokyo and Singapore to become Asia’s main gas pricing hub.

The center expects to trade more than 15 billion cubic meters of natural gas by the end of this year, or about 8 percent of China’s total consumption, Xu Shaoshi, director of the National Development and Reform Commission, said at a launch ceremony on Saturday.

“This will help accelerate the market-based reform in the energy markets, further improve pricing mechanism of oil and gas, promote China’s inclusion in international markets and deepen international energy cooperation,” he said.

The center, which aims to become Asia’s main trading and pricing hub within the next five years, was founded by the Xinhua News Agency and the NDRC with a registered capital of 1 billion yuan ($144.56 million).

Its shareholders include the country’s oil and gas giants, CNPC [CNPET.UL] and Sinopec.

It is a platform for spot trading of natural gas, liquefied petroleum gas, petroleum, unconventional gas and other energy products. It began trial operations in July last year and has 269 members.

Source: www.reuters.com