China’s government has introduced a new pricing tool for natural gas imports. It began publishing the LNG comprehensive import price index, which serves as a pricing reference for gas importers, earlier this month and will release updates every week, according to the state press agency Xinhua.
The index is likely to prove useful, given that China has become the world’s largest importer of natural gas. It was developed by a monitoring center controlled jointly by China’s General Administration of Customs (GAC) and the Shanghai Petroleum and Natural Gas Exchange (SHPGX).
Chen Ruyi, a senior analyst with SHPGX, noted that the introduction of the index marked a departure from China’s previous practice of linking gas prices to a basket of commodities dominated by crude oil. The change was necessary since the old index was not an adequate reflection of actual supply and demand conditions on China’s domestic market, he said.