NEW DELHI: The Indian Gas Exchange (IGX) is planning to launch long-duration contracts of 3-6 months on its platform and is expecting the petroleum ministry’s nod soon, its managing director and chief executive officer Rajesh Mediratta said on Friday.
“We are awaiting clearance from PNGRB (Petroleum and Natural Gas Regulatory Board), it is expected to come soon,” Mediratta said. Currently, IGX provides seven contracts — intra-day, day-ahead, daily, weekday, weekly, fortnightly, and monthly. Longer-term contracts are likely to aid in the company’s volumes traded on the exchange. In the first nine months of FY25, its total trade volume stood at 1 billion cubic meters or 40 million MMBtu.
These 3-6 month contracts will be rupee-denominated and linked to global benchmarks and IGX’s index named GIXI. “The new long-duration contracts will have a payment cycle of a fortnight compared to the current 2-3 days,” he said.
IGX had applied to PNGRB for approval to introduce a 3-to-6-month or 12-month contract back in March 2024.
IGX, a venture of Indian Energy Exchange, provides a marketplace to trade in the spot and forward gas contracts at designated delivery points across six regional hubs. The exchange facilitates indigenous prices based on domestic demand and supply, showcased by its benchmark price index, GIXI.
Additionally, the exchange is also planning to introduce compressed biogas or green certificates for trading, in line with the government’s mandate for blending of 1% compressed biogas in the CNG (compressed natural gas) and PNG (piped natural gas) segments under the City Gas Distribution sector starting FY26.
“If a city gas distributor doesn’t have a CBG plant, they can buy these certificates. Trading will also encourage compressed biogas production,” Mediratta said, adding that the government intends to begin the Compressed Biogas Obligation (CBO) from next fiscal and this will help distributors meet their obligations.
IGX has also signed a memorandum of understanding with Austria’s Central European Gas Hub AG (CEGH) for exploration of natural gas and renewable gases trading.
Key focus areas of the agreement include trading of natural gas and renewable gases like hydrogen, biomethane, and e-methane, commodity-related certificates, market development, training programs and gas-hub operations.
“A key objective of the partnership is to collaborate on best practices for the operations of natural gas trading focusing on enhancing the technical, operational and regulatory capabilities,” IGX said.
IGX and CEGH also plan to explore the development of trading platforms for emerging green gases like hydrogen, biomethane (including green gas certificates) and will work together to support gas hub operations in India.
“By partnering with CEGH, we aim to draw from our experience in Europe to accelerate the development of India’s gas market and expand the role of renewable gases in our energy mix. This partnership will enable us to co-develop innovative solutions for natural gas and renewable gas trading, strengthen market efficiency and enhance energy security,” Mediratta said.
The company’s initiatives come amidst the country’s target of increasing the share of gas in the domestic energy mix to 15% by 2030 from the current 6.2%.
Addressing a query on whether the company will be coming out with an initial public offering, Mediratta said that a decision in this regard will be taken by December 2025 to match the shareholding regulation outlined by PNGRB.
As per the regulation, no entity can hold more than 25% in the exchange after five years of its commissioning. Indian Energy Exchange holds 47.28% in IGX while the National Stock Exchange holds 26%. IEX and NSE both will need to dilute their shareholding in IGX to be able to comply with the regulation by December. The shareholders will decide whether to go for an initial public offering or private placement, he said.
Source: Business Standard
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