India’s first automated delivery-based gas trading platform, Indian Gas Exchange (IGX), has secured the necessary authorisation to operate as a gas exchange according to the provisions of the Petroleum and Natural Gas Regulatory Board (Gas Exchange) Regulations, 2020 for a period of 25 years. On October 8, 2020, IGX had submitted its application for authorisation in accordance with the prescription under the GER 2020 regulations of the PNGRB.

Sharing his views, D K Sarraf, Chairperson, Petroleum and Natural Gas Regulatory Board (PNGRB) said, “PNGRB is pleased to grant the necessary authorization to the Indian Gas Exchange Limited basis its application dated October 7, 2020. With this development, IGX has become first regulated gas exchange in the country. The exchange will play an instrumental role in transparent discovery of gas prices, accelerate investments in the value chain, aid in capacity utilization of pipelines as well as boost consumer confidence and in turn increasing gas demand in the country.” With this, IGX is expected to make a meaningful contribution to India’s target of increasing the share of gas in the overall energy mix from 6 per cent to 15 per cent by 2030.

S N Goel, Chairman, Indian Energy Exchange (IEX) and Director, IGX said, “This is a landmark development not just for IGX but for the overall gas sector and economy at large. The market mechanism will create competitive markets to benefit the end consumers with competitively priced gas and cost-effective price signals, will facilitate demand growth thereby leading to development and investments in upstream and downstream parts of the value chain. As a regulated entity, IGX is poised to further establish and reinforce greater trust and credibility among the market participants. IGX also envisions to create Indian gas benchmark as IEX has done for electricity”

IGX is a wholly owned subsidiary of the IEX, which is an automated electricity trading platform operating under the Central Electricity Regulatory Commission since 2008. IEX has a robust ecosystem of over 6,500 market participants, including the distribution utilities and major power generators. The platform offers trade in electricity through multiple market segments i.e. real-time, day-ahead and term ahead markets. It has also recently started trading in renewable energy at its platform. The electricity price discovered by IEX serves as a competitive benchmark for the power value chain and the distribution utilities. In addition, the open access consumers have also been leveraging the exchange to optimise their power procurement portfolio. 

On the other hand, the IGX offers trade in five contracts namely, daily weekly, weekday, fortnightly and monthly at three physical hubs at Hazira and Dahej in Gujarat and KG Basin in Andhra Pradesh. It will shortly begin trading with over 500 registered clients and 14 members. So far, it has cumulatively traded 74,600 million British thermal units since its launch on June 15, 2020. On the lines of IEX, the IGX aims to set competitive price benchmarks in the gas market.