Banks ING and Société Générale are in talks with traders to test liquefied natural gas (LNG) trading based on blockchain.
Blockchain, which originates from digital currency bitcoin, works as an electronic transaction-processing and record-keeping system that allows all parties to track information through a secure network, with no need for third-party verification.
While established energy suppliers and traders will continue operating as they are for the foreseeable future, blockchain is starting to break into the power market, nudging the status quo in an industry that has been slow to modernise.
In February 2017, ING and Société Générale offered their blockchain platform to trading house Mercuria to sell an African oil cargo to China.
The banks said their blockchain platform helped Mercuria reduce some processes from three hours to 25 minutes and make cost savings of up to 30%, supporting the case for expansion into LNG, natural gas converted to liquid form for easier storage or transport.