GLX platform aims to disrupt gas trading

Former Woodside executive Rob Cole is heading a new trading platform aiming to disrupt the way gas is bought and sold.

Former Woodside executive Rob Cole. Picture: Kelly Barnes

Former Woodside executive Rob Cole is heading up a new trading platform that aims to disrupt the way gas is bought and sold in the $US150 billion ($197bn) global LNG market.

Mr Cole is making his corporate return as the chairman of GLX, a start-up venture that is in preliminary talks with numerous LNG producers, traders and end-users around the world.

GLX is preparing to launch a new online system for live auctions of LNG spot cargoes, which it expects will increase the efficiency and transparency of LNG trading.

Mr Cole — a former executive director of Woodside who briefly served as the managing director of Beach Energy — has been joined at GLX by former Woodside employees Cameron Whitton and Roger Martin, head of commercial and corporate affairs respectively, while the former managing director of BP in Australia Phil Home is a non-executive director.

The company is the brainchild of chief executive Damien Criddle, who spent 18 years in commercial legal roles advising LNG sellers, traders and buyers.

The new system aims to modernise an LNG trading market that has changed little over the decades. LNG trading today still relies heavily on long-term relationships and contacts — often cultivated over dinners and ­karaoke sessions — with spot cargoes commonly sold through phone calls and messages to key individuals.

Mr Criddle told The Australian he had come up with the idea for GLX last year after witnessing first-hand the “frustrations” of the existing spot market trading ­system.

“What we’re proposing is a 21st century solution to what we see as an inefficient market,” Mr Criddle said.

The platform shapes as a possible rival to the in-house trading arms inside existing LNG producers. Woodside itself has been steadily expanding its trading arm in recent years in anticipation of an increasing shift away from a Japan-dominated LNG trade to a more diverse international ­market.

Despite the potential of GLX to tread on the toes of established suppliers and traders, Mr Criddle said the feedback from outside parties had been very positive.

“Ultimately it may change how people transact and it should help companies because they will have better information to inform decisions around how they trade,” he said.

The current LNG market is worth around $US150bn a year, of which between 20 per cent and 30 per cent is sold on a spot basis.

Both the value and volume of LNG traded is forecast to grow in coming years.

With numerous smaller nations increasingly looking to enter the market and buy LNG cargoes, and with traditional buyers such as Japan looking to lessen their reliance on the long-term LNG contracts they have favoured in the past, spot LNG trading is becoming increasingly common. Industry bodies have forecast that spot market trading could grow to as much as 50 per cent of that future market.

“With the transformational forces under way in the LNG industry, there’s a wave of supply coming to hit the market,” Mr Criddle said.

Mr Cole, who was once seen as a potential candidate for the top job at Woodside, stepped down from Beach only months after taking the post last year after a family illness forced him to return to Perth.