June 15, 2020
The platform features multiple buyers and sellers to trade in spot and forward contracts at designated physical hubs.
The Government of India aims to increase the share of gas in India’s energy basket from 6.5 per cent to 15 per cent by 2030
The Government is also working on several projects to improve access to clean fuel to ensure socio-economic development.
India is expected to have a 50-million tonne LNG terminal capacity and more than 30,000 km of pipeline in the next few years.
The Indian Gas Exchange (IGX), the country’s first nationwide online delivery-based gas trading platform, was launched by Minister of Petroleum and Natural Gas & Steel Shri Dharmendra Pradhan on June 15. Incorporated as a wholly-owned subsidiary of the IEX – India’s energy market platform, IGX will enable market participants to trade in standardised gas contracts. The gas trade on the platform, which is totally automated with a web-based interface, commenced operations on the same day. The platform features multiple buyers and sellers to trade in spot and forward contracts at designated physical hubs.
The platform comes amid the Government of India’s ongoing efforts to increase the share of natural gas in India’s energy basket from current 6.5 per cent to 15 per cent by 2030. Currently, the global average stake of gas in the energy mix is at 23.5 per cent. To drive the uptake of natural gas usage in India, it has become essential to drive investments in the overall gas value chain – including domestic production, re-gasification of imported LNG, transportation (pipelines), and consumption (industrial, commercial and residential applications). The IGX trading platform is expected to help generate the required investment.
Speaking on the occasion, Minister Pradhan said that the launch of the new electronic trading platform for natural gas will help the nation move towards free-market pricing of natural gas. As there will be a market-driven pricing mechanism, IGX will play a bigger role in realizing a free market for gas, he added. Meanwhile, the Petroleum and Natural Gas Regulatory Board (PNGRB) is working on the rationalization of tariffs to make natural gas affordable in every part of the country. The Government is also working on several projects across India to improve access to clean fuel to ensure socio-economic development.
The Indian gas market currently has multiple price bands for assets including pre-NELP, NELP, High Temperature, and High Pressure (HTHP) and Deepwater and Ultra Deep Water blocks. And the country has long-term gas contracts with many countries like Qatar, Australia, Russia, and the US, and has made investments abroad in strategic assets in Mozambique, Russia, and other countries. India is expected to have a 50-million tonne LNG terminal capacity and more than 30,000 km of pipeline in the next few years. IGC is expected to help streamline these activities and make gas energy mainstream in India.