(Correct to read November delivery, paragraph 2)
* CNOOC likely to auction more LNG next month - exchange official
* Volume small, but Shanghai exchange aims to build liquidity
* Shanghai market launched in 2015
BEIJING, April 18 (Reuters) - China National Offshore Oil Corp (CNOOC) on Wednesday sold cargoes of liquefied natural gas (LNG) on a domestic exchange for the first time, the latest step by China to boost supplies of the clean fuel as the nation shifts away from coal.
CNOOC sold 60,000 tonnes of LNG for delivery in July and another 30,000 tonnes for November delivery through an auction on the Shanghai Petroleum and Gas Exchange, an official at the exchange said.
Eighteen bidders took part with the total volume sold within 30 minutes, a CNOOC official involved in the auction said.
“Interest in the auction was very strong,” he said. He declined to be identified as he was not authorised to speak to media. He would not disclose the identity of the interested parties.
Though the volume is tiny compared to the nearly 70 million tonnes of natural gas China imported last year, the auction could help Chinese industrial buyers avoid the shortages that occurred this past winter.
Ahead of the winter, China moved millions of residential customers from coal heating to gas heating as part of its fight against air pollution. Supplies, however, were not enough to meet the new demand and industrial users were interrupted to make residential supply available.
Buying forward supplies through auctions like the Shanghai Exchange’s would give factories a chance to lock in prices and gas ahead of the winter heating season.
More auctions would also help build liquidity on the Shanghai Exchange. CNOOC is likely to hold another auction next month, the exchange official said. China is the world’s third-biggest consumer of natural gas.
The exchange official would not disclose the cargo prices, but said they were “relatively low” compared with market expectations.
Shanghai launched its electronic platform in 2015 to create a pricing benchmark for China’s burgeoning gas market. It faces potential competition from a rival in Chongqing.
Trading volumes on the Shanghai Exchange were thin during its first two year, but picked up last year ahead of the gas crunch this past winter. (Reporting by Meng Meng and Josephine Mason Editing by Kenneth Maxwell and Christian Schmollinger)