China Intends to Establish CNY-based Gas Trading System

On June 26, the World Energy Blue Book: World Energy Development Report (2017) was jointly issued by the Center for International Energy Security Studies and Social Sciences Academic Press, two parts of the Chinese Academy of Social Sciences (CASS).
China’s strategies to upgrade its industrial structure and protect the environment have heated up domestic use of natural gas, with gas use growing faster than primary energy consumption (PEC). However, natural gas supplies only around 6% of the nation’s PEC, a quarter of the world’s average of 24%, suggesting that the domestic fossil energy mix remains unreasonable, according to the blue book.
Natural gas is replacing oil to become the core of the world’s energy mix. This will gradually free gas prices from oil price impacts, so establishing an international natural gas trading center in China not only becomes feasible but appears to be necessary.
Thirty two percent of global gas demand arises from Asia already, with growth highlighted in China, and 20 years from now Asia may be consuming 50%. As China becomes more powerful, the Chinese Yuan (CNY) is accordingly more internationalized. Natural gas trade may be the best platform for the Yuan’s next increment. Therefore, a CNY-based gas trading system is significant for China, in terms of energy and financial security in particular.