India Launches Delivery-based Gas Trading Platform

Participants will be able to digitally trade natural gas in both the spot and forward markets, facilitating price discovery and lowering overall gas prices.

IEX (Indian Energy Exchange), the country’s largest electricity trading platform, has announced the launch of Indian Gas Exchange (IGX), the first nationwide online delivery-based gas trading platform.

Powered by technology from GMEX, a provider of multi-asset exchange trading and post-trade technology, the IGX platform is fully automated with a web-based interface to provide seamless trading experience to the customers, IEX said in a statement.

Incorporated as a wholly-owned subsidiary of the IEX, IGX will enable market participants to trade in standardised gas contracts, beginning with six natural gas products from three gas hubs in India.

Participants will be able to digitally trade natural gas in both the spot and forward markets, reducing existing hurdles buyers and sellers experience trying to find each other through multiple dealers and negotiate pricing.

Following a membership drive launched in March this year, IGX currently has signed on 12 members and more than 350 registered clients.

Competitive price discovery on the new platform will help to facilitate the availability of gas at lower prices across industries, stimulate demand, and facilitate greater investments in domestic gas exploration, the IEX statement said.

Indeed, domestic gas production in India has been falling over the past two years, as current sources of natural gas have become less productive. Domestically produced natural gas now accounts for less than half of India’s consumption; imported LNG accounts for the other half.

“We endeavour to build gas markets in the country to support the government’s vision to increase the share of gas from 6% currently to 15% by 2030 in India’s energy mix,” said Rajiv Srivastava, managing director and CEO at IEX, and a director of IGX.

The new platform will drive industrial competitiveness and sustainability, spur investments in the gas value chain, deliver efficient utilisation of pipeline infrastructure, and help to revive gas-based power plants, he added.

“IGX will architect India as a market-based gas economy, whilst also leading to sustainable environmental benefits.”

Additional reporting from IndianExpress

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