 "Rajesh Mediratta, CEO & MD of Indian Gas Exchange")
Indian Gas Exchange (IGX), the only gas exchange in the country, sees domestic gas demand picking up pace in the coming years with prices softening to $8-$9 per million British thermal unit (MBTU) by 2027, said Managing Director & CEO, Rajesh Mediratta in an interview with Shubhangi Mathur. Despite the subdued demand from the power sector in the current year due to prolonged monsoon, volumes traded on the exchange are likely to rise by 15-20 percent in the current fiscal, he said. Edited excerpts..
Domestic gas demand has remained muted so far. What is your expectation for demand going forward?
Domestic demand will definitely increase but will also depend on gas prices. The prices are still not coming down from $12-13 per metric million British thermal unit (mmbtu) level and therefore we have not seen an increase in half-year (consumption) volumes so far. We are hopeful that prices will be softer going forward which will boost demand. Internationally, especially in Qatar and the US, a lot of liquefaction capacities are coming up; Final Investment Decision (FIDs) have already happened. More than 50 per cent of new liquefaction capacities is being created for Liquefied Natural Gas (LNG). We are very hopeful that in 2026-27 there will be lower gas prices because there will be higher supply.
What is your gas price outlook?
It will be in the range of $11-$13 per mmBtu in this year (2025). In 2026, it may still remain in double-digits but going beyond 2027, prices may be in single-digit say $8-9 per mmBtu.
Which sectors will drive gas demand in India?
This year, power demand was muted because of the prolonged monsoons and therefore gas consumption did not increase. But otherwise, gas demand should go up going forward because City Gas Distribution (CGDs) and the LNG segment will keep growing. CGD is already operating and there is about 10 per cent demand growth in the sector despite the overall decrease in total gas volumes. The CGD segment has been performing better than other sectors. LNG in transport and LNG bunkering can come up as new areas which will contribute to demand growth.
What is your outlook for volume traded on IGX for FY26?
In the first six months, we have already done 70 per cent more volumes than last year. This has been a good growth. We anticipate good volume growth in the next half of the year as well. We look forward to a growth of 15-20 per cent in volumes (in FY26) from last year. We did volumes of about 4.1 million metric standard cubic meters per day (mmscmd) last year in six months and this year we have achieved volumes of 5.5 mmscmd in the first half of the year.
You recently launched three-months and six-months contracts on IGX. What is the update on the launch of one-year contracts?
Earlier in the year, we launched three-months and six-months contracts. We planned to launch a year contract too but were advised by PNGRB to initially only launch three- and six-months contracts and based on experience we can look for one year contracts too. We did stakeholder consultation in March and received feedback that market participants need one-year contracts too. We will re-apply for approval as stakeholders advised, with one-year contracts. We plan to do consultation again with market participants and then we will re-apply to PNGRB for one-year contracts by the end of October.
How has been the market response of the new contracts you launched on IGX?
The response of the new contracts including three months, six months and small scale Liquefied Natural Gas (ssLNG) has been average. We have done a few contracts but it should have been more. This market segment is yet to grow. We have done one trade each for three- and six-months contracts in the last six months since we launched them.
Are you planning to launch any new products on your platform?
We are working on a few products. IGX currently trades gas on the platform but we are now also looking at LNG trading. LNG Marketers should be able to sell LNG cargoes to Indian players and the advantage would be that they would not have to pay value added tax (VAT) but only customs duty. We are also working on LNG aggregation. International agencies or companies which do not have an Indian base should be able to offer LNG on our platform. We are also working on an LNG regas capacity booking platform for the willing LNG terminals. This will help LNG terminal operators to market their LNG regas capacity to international LNG marketers.
Has there been a headway in the launch of green certificates?
We were working on green certificates for Compressed Biogas (CBG). We are awaiting enabling guidelines from Ministry of Petroleum and Natural Gas (MoPNG) or PNGRB.
What is the update on the IPO of IGX?
We are currently working on it.
