India's Long March to a Gas Hub

The Indian government has started the process of setting up a gas trading hub, as the downstream regulator, Petroleum and Natural Gas Regulatory Board (PNGRB), April 13 tendered for a consultancy to advise it on how to bring it about.

The government wants gas to account for about a sixth of the primary energy mix 2030, up from a fifteenth now. In order to achieve this target, the Indian oil and gas ministry needs to encourage gas production, encourage LNG imports and keep building pipelines. “In order to further boost the consumption of natural gas in the country, the government is considering the establishment of a gas trading hub/exchange (GTHE), where natural gas can be traded, and supplied through a market-based mechanism instead of multiple formula driven prices,” PNGRB said. At present, the government sets the price of domestic gas every six months, using complicated formulae. 

The successful consultancy will help carry out a detailed study on what is needed for a hub to function in India and use the experience of the US, UK and Australia, where there are liquid gas markets. PNGRB said that the chosen consultant will have 18 weeks to complete the job and bids must be submitted by April 23 2018.