(Yicai Global) March 28 -- China National Offshore Oil Corporation and France’s TotalEnergies have reportedly completed China’s first purchase of imported liquefied natural gas to be settled in Chinese yuan through the Shanghai Petroleum and Natural Gas Exchange.

The deal is reported to have an energy content of 3.2 billion to 3.4 billion British thermal units, and the LNG comes from the United Arab Emirates, Shanghai Securities News reported today. It did not mention the value of the deal.

The first international LNG transaction settled in yuan is an attempt to promote multi-currency pricing, settlement, and cross-border payment, SHPGX Chairman Guo Xu said.

The exchange launched international LNG trading in August 2020 and it will continue to play a platform role and strengthen the financial infrastructure for the cross-border yuan settlement business, Guo said.

The SHPGX was established in 2015 and the volume of natural gas traded on the exchange reached 92.86 billion cubic meters last year.

CNOOC, the largest offshore oil and gas field operator in China, is committed to innovating international resource pricing and settlement models, according to Deputy General Manager Yu Jin. The promotion of international resource procurement based on yuan settlement can promote the globalization of energy trading and build a more diversified ecology, he noted.

At present, China’s yuan is the fifth most-used payment currency in the world, and its use in foreign exchange trading has increased to a global market share of 7 percent, the fastest growth among currencies in the past three years.

The scale of China’s oil and gas imports is also growing. In 2022, China imported more than 500 million tons of crude oil and more than 100 million tons of natural gas, including 63.44 million tons of LNG, and the sources are increasingly diversified.

Editor: Tom Litting