IGX hopeful of receiving regulatory approval for multi-month contracts: CEO

MoU inked with Central European Gas Hub for collaboration in trading of natural gas, hydrogen, and biomethane

The Indian Gas Exchange (IGX) is hopeful of receiving approval from the Petroleum and Natural Gas Regulatory Board (PNGRB) for introducing multi-month or long-term gas contracts, IGX CEO Rajesh Mediratta told reporters on Wednesday.

 

The only national-level gas exchange for the physical delivery of natural gas, IGX aims to begin offering 3-month, 6-month, and 12-month contracts. It currently provides seven options: intra-day, day-ahead, daily, weekly, weekday, fortnightly, and monthly contracts. Prices for long-term contracts will be linked to external benchmarks such as Platts JKM, WIM, Dated Brent, and the company’s GIXI index, which was launched in 2022.

 

IGX has signed a Memorandum of Understanding (MoU) with Austria’s Central European Gas Hub (CEGH) to explore collaborative opportunities in gas trading, including renewable gases like hydrogen, biomethane, and e-methane, Mediratta said. Both entities will also work together on commodity-related certificates, market development, training programmes, and gas-hub operations.

 

In 2024, IGX began trading liquefied natural gas (LNG) from regasified LNG terminals and distributed fields in small-scale LNG (ssLNG) containers, Mediratta said. This niche business is expected to see major growth in the coming years. ssLNG contracts are set to benefit buyers located in areas not yet covered by the national gas grid.

 

More than 1,000 trades were executed on IGX in the first nine months of FY25 (2024-25), surpassing the 998 trades executed in the entirety of FY24. IGX currently has more than 35 sellers and over 190 buyers.

 

Demand to rise

  In 2025, domestic demand for natural gas is expected to increase, driven by the expansion of city gas distribution and burgeoning demand from the power sector, Mediratta said. Gas prices are also showing lower volatility over a longer timeframe and are expected to remain less volatile in general, he added.

 

IGX data shows that domestic gas demand has been rising year-on-year every month. From January to November 2024, India's total gas consumption grew by 7 per cent to 199 million metric standard cubic metres per day (MMSCMD) compared to the corresponding 11 months of 2023.

 

"Prices are expected to remain range-bound given the robust supply of liquefied natural gas (LNG), brimming European Union storage levels, and an increase in liquefaction capacity," the company said in a presentation.

 

Currently, operational capacity for LNG terminals stands at 47.7 million metric tonnes per annum (MMTPA). This is expected to reach 70 MMTPA in the next three to four years.