---

The Hong Kong Mercantile Exchange (HKMEx) has said that its plan to launch energy contracts in 2010 may 'not necessarily' include fuel oil, Reuters reports.

Speaking at the Reuters Global Energy Summit, Albert Helmig [pictured], HKMEx president said "We are launching energy contracts in 2010, not necessarily fuel oil, but feedstocks and petroleum products."

The comments follow those made by HKMEx last year that it would be launching a fuel oil futures contract in March 2009.

Helmig said the launch had been delayed due to complications related to physical delivery in China, which he said were "very unique issues that are hard to execute."

Helmig added that the potential energy contracts to be launched in 2010 include crack spreads, or oil products' relative value to benchmark crude oil, which can be used as a hedging tool for margins, or profit levels of oil refiners.

With new refineries coming on-stream in the region, Helmig said that there was a gap in the market for crack spread hedging in Asia.

News that HKMEx may not be launching a fuel oil futures contract next year follows the confirmation last month that the Singapore Exchange (SGX) is due to launch a futures contract for bunker fuel during the second half of 2009.

According to market sources, a contract for 380-centistoke (cst) fuel oil in the port of Singapore would be launched first with the possibility of SGX also developing a 180-cst contract depending on how the market responds.

380-cst product would reportedly be traded on a free-on-board (FOB) basis, which would enable cargoes to be loaded from any shore-based terminal in Singapore.