(Adds details on the contract, comments by CME executive, background)
Sept 24 (Reuters) - CME Group Inc on Monday joined the race to provide oil traders with a futures contract deliverable in the U.S. Gulf Coast, as crude exports have surged since the lifting of a decades-old ban.
The company said it will offer a new WTI Houston crude futures contract with three physical delivery locations on the Enterprise Products Partners LP's Houston system, beginning in the fourth quarter.
The new WTI Houston futures contract will be listed with and subject to the rules of the New York Mercantile Exchange (NYMEX), beginning with the January 2019 contract month.
"It's going to be a primarily commercial contract to start with – we're seeing this as something that will be of interest to producers, exporters and importers," said Owain Johnson, managing director of energy research at CME.
The WTI Houston contract's specifications will be about 40-44 degrees API gravity and 0.275 percent sulfur.
Benchmark U.S. crude futures are currently deliverable at Cushing, Oklahoma. However, the growth in exports has underscored the hub's waning influence as the primary measuring stick for the U.S. oil market and the leading barometer of future supply, demand and prices.
CME's announcement comes after rival Intercontinental Exchange said in July it would offer a crude futures contract deliverable at Magellan Midstream Partners' East Houston terminal.
Record U.S. crude production and exports this year have put the spotlight on the Gulf Coast, and in particular Houston, as a vital pricing center.
The United States lifted a 40-year ban on crude oil exports in late 2015 and since then tankers filled with U.S. crude have landed in more than 30 countries.
CME expects market participants to trade its new Houston contract largely as a spread and as a result, boost liquidity in its Cushing contract as well.
"We're not seeing this as in any way a replacement for Cushing," Johnson said. "It's an enhancement to Cushing."
Reporting by Devika Krishna Kumar in New York Editing by Matthew Lewis