Indian Gas Exchange gets nod to trade in domestic gas
The Indian Gas Exchange (IGX) has received approval from Petroleum and Natural Gas Regulatory Board (PNGRB) to trade domestic gas on its platform, it said on May 12 in a statement. IGX is India’s first automated national-level gas exchange for the physical delivery of natural gas.
IGX will launch the domestic gas trading starting May 16. This approval is in line with the petroleum and natural gas ministry’s notification dated August 19, 2021, where domestic gas producers were authorised to sell up to 500mn m3 or 10% of annual production from the contract area, whichever is higher, per year through gas exchanges.
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With this approval, upstream gas production of marketing and pricing freedom gas can now be effectively managed through flexible contracts at IGX. “In addition to this, producers will also have immediate sales opportunity which will eventually result in maximisation of domestic gas production and increased liquidity on the platform,” IGX said.
“Small buyers who currently don’t have access to domestic gas either due to their size or allocation priority can now come to the exchange and procure domestic gas at competitive prices and ultimately build a gas ecosystem,” IGX added.
Only a part of India’s gas production can be sold freely at present while the rest is under an administered price regime. The biggest volume of such gas with marketing and pricing freedom comes from the Reliance-BP’s fields in the KG basin off India’s east coast.
IGX said it is also adding regional hubs and each regional hub will have multiple delivery points to facilitate the trade of domestic gas on the exchange. IGX recently extended the horizon of the monthly contract from three to six months.
The exchange currently facilitates delivery-based trades in six different contracts such as day-ahead, daily, weekday, weekly, fortnightly and monthly at five different designated physical hubs - Dahej, Hazira, Dabhol, Jaigarh and KG Basin.