Delivery-based natural gas trading platform, Indian Gas Exchange (IGX), launched

Delivery-based natural gas trading platform, Indian Gas Exchange (IGX), launched

Part of: GS-Prelims and GS-III – Infrastructure (Energy)

In News:

• Union Petroleum and Natural Gas Minister launched the Indian Gas Exchange (IGX) recently. 

Key takeaways 

• It is the first nationwide online delivery-based natural gas trading platform. 
• It is fully automated with a web-based interface. 
• It has been incorporated as a wholly owned subsidiary of the Indian Energy Exchange, which is India’s energy market platform.
• The trading platform will enable market participants to trade in standardised gas contracts.
• It is expected to facilitate transparent price discovery in natural gas.
• It shall also facilitate the growth of the share of natural gas in India’s energy basket.
• It provides hassle-free trading experience to the customers.
• It will allow buyers and sellers of natural gas to trade both in the spot market (financial instruments, such as currencies are traded for immediate delivery) and in the forward market (an over-the-counter marketplace that sets the price of a financial instrument for future delivery). 
• The trading of natural gas will be for imported natural gas across three hubs — Dahej and Hazira in Gujarat, and Kakinada in Andhra Pradesh.
• Imported Liquified Natural Gas (LNG) will be regassified and sold to buyers through the exchange. 
• The need for buyers and sellers to find each other shall be removed.
• The price of domestically produced natural gas is decided by the government which will not be sold on the gas exchange.