A consortium of major energy companies and banks are working together to build a blockchain-based digital platform for energy commodities trading.

BP, Dutch Royal Shell, and Norwegian oil firm Statoil have invested in the new venture. Other members of the consortium include trading houses Gunvor, Koch Supply & Trading, and Mercuria; and banks ABN Amro, ING and Societe Generale. The platform is expected to be operational by the end of 2018.

The partnership aims to create a secure, real-time blockchain-based digital platform to manage physical energy transactions from trade entry to final settlement. It’s hoped that it will eventually lead to moving away from traditional paper contracts and operations documentation to secure, smart contracts and authenticated transfers of electronic documents.

Edward Bell, a commodities analyst at Dubai-based lender Emirates NBD PJSC, said to Reuters, that:

“Ideally, it would help to eliminate any confusion over ownership of a cargo and potentially help to make managing risk more exact if there are accurate timestamps to each part of the trade.”

With some of the world’s largest energy suppliers and banks taking part, it’s hoped that the platform will lead to the migration of all forms of energy transaction data to the blockchain. This, in turn, will reduce costs for industry players while improving data quality, strengthening security and speeding up settlements industry-wide.

According to a statement, the new venture is seeking regulatory approval and would be run as an independent entity.

“The platform aims to reduce administrative operational risks and costs of physical energy trading, and improve the reliability and efficiency of back-end trading operations,” the statement said.

There are several companies experimenting with the blockchain to track energy trading. At the end of October, it was reported that U.K.-based Energi Mine had launched a blockchain-based platform to reward energy conservation. The aim of the platform is to decentralise the $2 trillion global energy market by rewarding people and organisations for reducing their energy consumption. It’s achieving this by issuing ETK tokens to reward energy efficient behaviour, such as taking public transportation or purchasing energy-efficient appliances.

This summer, Reuters reported that BP and Eni were deepening their exploration into blockchain trading in European gas. Whereas, some of Europe’s top utility companies – from Enel SpA to RWE AG – were reported to have joined a blockchain energy trading trial, which started in August. The aim of the trial is to test the technology in wholesale power and natural gas markets. In total, 23 utility participants paid 22,000 euros to fund the final development of the project.