India launched its first gas trading exchange on June 15, 2020, enabling local and foreign players such as Shell, Vitol and Trafigura to sell directly to domestic customers. The India Gas Exchange (IGX) platform has been incorporated by Indian Energy Exchange, India’s leading energy market platform. IGX is fully automated with web-based interface to provide seamless trading experience to the customers and is powered by technology from GMEX. It will enable market participants to trade in standardised gas contracts. IGX offers spot and forward contracts at three physical hubs, including Dahej and Hazira in Western Gujarat and Kakinada in Andhra Pradesh. However, there are plans to add more such hubs in the future.
IGX is expected to play an instrumental role in transforming India’s gas markets, and enhance industry’s competitiveness. India is expanding its gas infrastructure, including connecting households to the gas pipe network, as it aims to raise the share of gas in its energy mix from the current 6.2 per cent to 15 per cent by 2030. The country’s current daily consumption of gas, which is less polluting than other fossil fuels such as coal and oil, is about 165 million cubic metres, of which 47 per cent is met through imported liquefied natural gas (LNG).
Currently, global traders sell LNG to Indian clients through companies such as Peronet LNG, Indian Oil Corporation Limited (IOCL), GAIL (India) Limited, Bharat Petroleum Corporation Limited and the Gujarat State Petroleum Corporation. Shell is the only foreign company that sells directly to customers through its LNG terminal at Hazira.