Indian Gas Exchange Receives PNGRB Permission To Commence Domestic Gas Trading

Highlights :

  • Even as gas prices are elevated right now, for the long term a strong gas trading market will serve a very useful purpose to meet market needs in India.
Indian Gas Exchange Receives PNGRB Permission To Commence Domestic Gas Trading

The Indian Gas Exchange (IGX), India’s first authorised Gas Exchange, has received approval from Petroleum and Natural Gas Regulatory Board (PNGRB) to trade domestic gas on its platform. IGX will launch the domestic gas trading starting 16th May 2022. This approval is in line with MoPNG’s notification dated 19 August’21 where domestic gas producers were authorised to sell up to 500 million standard cubic meters or 10% of annual production from contract area, whichever is higher, per year through Gas Exchanges.

With this approval, upstream gas production of Marketing & 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. 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.

With the aforesaid approval, IGX would be able to facilitate trade all Marketing & Pricing Freedom Gas subject to terms and conditions of MoPNG OM dated 19th August’21. IGX is also adding regional hubs and each regional hub will have multiple delivery points to facilitate trade of domestic gas on the Exchange as per amended Gas Exchange Regulations notified on 6th May,22. IGX recently extended the horizon of the monthly contract also from three to six months with effect from 1st April,22.

Rajesh K Mediratta, Managing Director & CEO, IGX said “We are excited to receive much -awaited approval from PNGRB to trade domestic gas on the Exchange platform. This is like beginning of new era in gas markets. Exchange will enable trading of marketing freedom ceiling price gas (ONGC & Reliance KG D6) and marketing and pricing freedom gas namely CBM, DSF etc in more flexible spot basis up to 6 months. Now, end consumers will be able to buy HPHT gas at a current ceiling price of $9.92 per mmBtu through IGX. And, for other domestic gas, where there is no ceiling price, the buyers would receive gas at a much better price in spot market. In addition to above, Exchange flexibility, ease-of-trade, payment security and transparency will further provide encouragement and incentives to offshore and on-shore gas producers especially Discovered Small Fields, Coal Bed Methane producers etc. This development will surely help IGX to further accelerate India’s journey towards a gas-based economy.”

IGX currently facilitates delivery-based trades in 6 different contracts such as Day-Ahead, Daily, Weekday, Weekly, Fortnightly and Monthly at 5 different designated physical hubs – Dahej, Hazira, Dabhol, Jaigarh and KG Basin.

IGX was established in 2020, as India’s first automated national-level Gas Exchange for physical delivery of natural gas. IGX is a subsidiary of the Indian Energy Exchange Limited, the dominant power trading exchange in the country.

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