Indian Gas Exchange(IGX), India’s first gas exchange platform, was launched on Monday by the Minister of Petroleum and Natural Gas & Steel, Dharmendra Pradhan.
During the virtual launch, Dharmendra Pradhan said that this new electronic platform would help the nation move towards a free-market pricing system of natural gas.
Exchange expected to help in maintaining transparent prices and boost the growth of natural gas use in the energy sector of the country. The central government is planning to increase the consumption of natural gas to 15 percent from the current level at 6.2 percent as part of diversifying the energy use.
Indian Energy Exchange is the parent company of the gas exchange. In February 2020, IGX invited members to be part of this new platform before a formal launch. When launched IGX had 12 members and 300 clients, including buyers, sellers, and users.
The IGX is a digital platform where both the buyer and sellers of natural gas trade for imported natural gas across Dahej and Hazira in Gujarat and Kakinada in Andhra Pradesh. Imported Liquified Natural Gas (LNG) will be regasified and sold to buyers through this exchange, eliminating the need for buyers to finder sellers.
Short contracts ranging from one day to one month will be allowed before the contract for the supply of gas was six months to one year. The government will fix the price of domestically produced gas and it won’t be traded on the exchange.
India is planning to increase its use of natural gas in the energy mix from 6.2 percent in 2018 to 15 percent by 2030. During budget, Finance Minister Nirmala Sitharaman announced government plans to expand National Gas Grid to 27,000 km from the present 16,200 km.
This exchange will help bring transparency to the price of natural gas in the country through the trade. A boost needed for the country which is over depended on coal for its energy use this platform can boost the consumption of natural gas.