The Indian Gas Exchange (IGX) has sought regulatory approval to launch three- to six-month gas contracts benchmarked against international gas prices, CEO Rajesh Kumar Mediratta said.
IGX currently allows gas suppliers to sell the fuel on the exchange for periods ranging from daily, weekly, biweekly and monthly. It also offers intraday trading at a fixed price.
Mediratta said the exchange has applied to the regulator, Petroleum and Natural Gas Regulatory Board (PNGRB), for permission to launch three- and six-month supply contracts indexed to gas benchmarks such as FIXI and Platts JKM, WIM and Dated Brent.
“We are waiting for permission from PNGRB,” he said.
The new long-term contracts will have a fourteen-day payment cycle, compared to the current system where payments are made within 2-3 days of delivery.
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IGX also wants to introduce green certificates for the trade, he said, because the government wants to make the use of 1 percent compressed biogas (CBG) mandatory for city gas sellers.
“If town gas retailers receive supplies from CBG plants, they will have no problem complying with the obligation to have 1 percent CBG in the gas they supply. But in places where they don’t have CBG supplies, they can buy these certificates,” he said.
He said the volume of gas traded on the exchange crossed the 1 billion cubic meters (4 crore million British thermal units) mark in the first nine months of the current fiscal year. This volume is equivalent to 4.1 crore mmBTU volumes traded in the entire fiscal year 2023-2024 (April 2023 to March 2024).
IGX has also signed an MoU with the Austrian Central European Gas Hub to explore gas trading opportunities, including for green gases such as hydrogen and methane.
“This partnership aims to strengthen the Indian gas market by leveraging CEGH’s European market expertise and IGX’s deep expertise in the Indian gas market,” he said.
Key areas of focus of the MoU include trade in natural gas and renewable gases such as hydrogen, biomethane and e-methane, commodity-related certificates, market development, training programs and gas hub activities.
A key goal of the partnership is to collaborate on best practices for natural gas operations, with a focus on improving technical, operational and regulatory capabilities.
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Insights from the Indian and European gas markets will be leveraged and international best practices will be shared, facilitating the creation of a liquid and transparent gas market.
IGX and CEGH also plan to explore the development of trading platforms for emerging green gases such as hydrogen and biomethane (including green gas certificates). Both sides will also work together to support gas hub activities in India, he said.
“This partnership will enable us to jointly develop innovative solutions for natural gas and renewable gas trading, strengthen market efficiency and increase energy security,” he added.
