BP, Shell Energy North America (US), L.P, Castleton Commodities International (CCI), Koch Energy Services, Macquarie and Mercuria Energy America founded Eleox, which has just announced that its physical natural gas blockchain trading platform is now operational.
In the recently posted announcement, Orlando Alvarez, head of gas and power trading at BP, said the following:
"The immediate benefits of digital efficiency and reduced operational costs are key drivers for us. Eleox's end-to-end processing of Ox Pair confirmations through digitised nominations and billing will add value to our business."
For its part, Eleox said that transactions can be directly confirmed digitally on their blockchain-based Ox Pair platform. It described it as follows:
"confirmed transactions are then recorded on each customer's private, permission-based distributed ledger, creating a legally binding transaction confirmation."
The real-time digital approach manages transactions from post-trade to settlement, replacing paper contracts and manual reconciliation processes, and will initially focus on improving the post-trade process for physical natural gas in North America, the platform said.
Instead of each gas giant having its own centralised database that does not 'talk' to each other, they can each run a blockchain node and thus connect to each other. In this way, blockchain data becomes similar to an authenticated shared digital PDF that they all agree is correct and neither party can change without their consent.
This particular use of blockchain emerged in 2017 when numerous pilot projects and explorations were announced. Now, companies like JPMorgan are also quietly settling billions in repurchase agreements on a blockchain platform.
For physical natural gas trading, this simplifies all the paperwork and makes it digital, increasing efficiency. Carolyn Comer, President at Shell Energy North America, responded as follows:
"Shell's going live on the Eleox platform is an important milestone in our commitment to innovation and digitisation in our trading operations."
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