THE Shanghai International Energy Exchange (INE) said Thursday it had signed an agreement with PetroChina International Co. to cooperate on the overseas delivery for its low-sulphur fuel oil futures contract.

Both parties have reached a consensus on cross-border overseas delivery for the marine oil and see the move as an “important foundation” for China’s first futures delivery “going global,” Shanghai Futures Exchange-owned INE said.

This would be the first time a Chinese futures contract would be deliverable outside of China, which could boost the liquidity and the pricing influence of the low-sulphur fuel oil contract.

Reuters reported last week that the INE was considering using PetroChina-owned oil storage sites in Singapore as a delivery point for its low-sulphur fuel oil futures contract.

INE’s statement did not specify where the storage sites or delivery points would be, but mentioned that PetroChina had distribution centers for bonded marine fuel oil domestically in the eastern port city of Zhoushan, as well as overseas in Singapore and the UAE.

China launched its low-sulphur fuel oil futures contract in June, following a ruling by the International Maritime Organization (IMO), which banned ships from using high sulphur content fuel oil this year unless equipped with exhaust scrubbers. (SD-Agencies)