IMEX offers energy trading platform

QATAR, which has the world's third biggest natural gas reserves, is to host an International Mercantile Exchange (IMEX) for energy trading – the first such platform in the Middle East. 

To be located in the US$2.6bil Energy City Qatar, IMEX will feature some of the most technologically advanced trading platforms in the world and be regulated by the Qatar Financial Centre Regulatory Authority (QFCRA). 

IMEX is initiated by Bahrain-based Gulf Energy, a global consortium of energy experts that last month signed memoranda of understanding (MoU) with the Qatar Financial Centre Authority and QFCRA to establish the exchange in Doha. 

On the vision for IMEX, Gulf Energy chairman Esam Janahi said although the Middle East accounted for over 60% of the world's proven oil reserves and over 40% of the world's natural gas reserves, the region did not yet have a single energy trading platform. 

“IMEX was conceived to bridge this gap by offering a transparent and technologically advanced energy trading platform under a well respected regulatory authority. 

“IMEX is a natural fit into the region's first energy business centre, Energy City Qatar. We are also exploring the possibility of collaborating with other similar exchanges in Asia and Europe to enhance the overall product service offering from IMEX,” he told a press conference after the MoU signing in Doha. 

Janahi also said the exchange would seek input from Qatar Petroleum on the type of contracts, and would consider cross-listing of commodities with other exchanges.  

Gulf Energy has hired Washington, DC-based consultants PFC Energy and Hess Energy Co (HECO) to advise on the design of the operating mechanism of the Qatari exchange.  

PFC is an acknowledged leader in providing strategic advice on the competitive, economic and political aspects of the global energy business. HECO is the energy advisory affiliate of Amerada Hess, a recognised leader in the exploration, production, refining and marketing of energy products worldwide.  

Qatar's Economy and Commerce Minister Sheikh Mohamed bin Ahmed Al Thani said IMEX would seek to create “a right price” and a “more realistic picture because it is in this region” rather than a hedged price arrived at elsewhere, such as in New York, Singapore or London. 

“With Qatar being on track to be the leading exporter of liquefied natural gas by 2010 and an important exporter of oil, the introduction of IMEX fits well into the country's dedication to the energy sector and world-class finance,” he said. 

Asked when IMEX would start functioning, Janahi said it would take three to six months to put in place the necessary regulatory framework.  

QFCRA chairman Phillip Thorpe said it usually took up to a year for any framework to be put in place, but by adopting the best practices used at energy bourses worldwide, IMEX would be able to go live in a relatively short time. 

PFC president Vahan Zanoyan said the exchange would create a long-term market for hydrocarbons, but that did not mean it would affect the short-term spot markets. 

“This will be a regional exchange offering traders price discovery in new contracts and opportunities to hedge risk,” he added. 

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