Indian Gas Exchange

On 15^th June, 2020, the government has launched Indian Gas Exchange (IGX) –first nationwide online delivery-based gas trading platform.

Domestically produced natural gas currently accounts for less than half the country’s natural gas consumption; imported Liquefied Natural Gas (LNG) accounts for the other half.
LNG imports are set to become a larger proportion of domestic gas consumption as India moves to increase the proportion of natural gas in the energy basket from 6.2% in 2018 to 15% by 2030.

IGX will be a delivery-based trading platform for delivery of natural gas.
Incorporated as a wholly owned subsidiary of the Indian Energy Exchange (IEX) - India’s energy market platform, IGX will enable market participants to trade in standardised gas contracts.
The platform is fully automated with web-based interface to provide seamless trading experience to the customers.

The IGX will offer six market products beginning from day-ahead market and forward contracts including - Daily, Weekly, Weekday, Fortnightly and Monthly at three physical hubs in Dahej, Hazira in Gujarat and Kakinada in Andhra Pradesh.
The gas exchanges are expected to work on the lines of power exchanges, which determines the price based on supply and demand and market forces.
The exchange also allows much shorter contracts – for delivery on the next day, and up to a month – while ordinarily contracts for natural gas supply are as long as six months to a year.
Imported Liquified Natural Gas (LNG) will be re-gassified and sold to buyers through the exchange, removing the requirement for buyers and sellers to find each other.

As the price of domestically produced natural gas is decided by the government, so, it will not be sold on the gas exchange.

Through IGX, India's vision on mega investments on Liquefied Natural Gas (LNG) terminals, gas pipelines, CGD infrastructure and permission for market driven price mechanism will be materialized.

IGX will play an instrumental role in transforming India’s gas markets, positioning India as a sustainable economy and enhancing industry’s competitiveness.
The exchange will help bring down the price of natural gas through competitive trade, boosting usage in the country that relies heavily on cheaper coal for its energy needs.
IGX will drive industrial competitiveness, sustainability, spur investments in the gas value chain, deliver efficient utilisation of the pipeline infrastructure as well as ensure revival of gas-based power plants.
It will architect India as a market-based gas economy, whilst also leading to sustainable environmental benefits.
It would also help small consumers to get short-term supply of fuel at competitive rates.

LNG is natural gas (predominantly methane, CH4, with some mixture of ethane, C2H6) that has been cooled down to liquid form for ease and safety of non-pressurized storage or transport.
To enable maritime transport, the natural gas is cooled down by means of a refrigerated cycle (compression, condensation, expansion, evaporation) that transforms the gas into a liquid form at -160°C: this is known as Liquefied Natural Gas (LNG).
The combustion of natural gas primarily emits water vapour and small amounts of carbon dioxide (CO2).
This property means that associated CO₂ emissions are 30 to 50% lower than those produced by other combustible fuels.
Russia has the world's largest supply of natural gas, followed by Iran and Qatar.
It is used as a feedstock in the manufacture of fertilizers, plastics and other commercially important organic chemicals as well as used as a fuel for electricity generation, heating purpose in industrial and commercial units.