The Indian Gas Exchange wants regulatory nod to launch a 3-6 month gas contract, Rajesh K Mediratta, chief executive of the company said on Friday.
“We are awaiting a clearance from PNGRB (Petroleum and Natural Gas Regulatory Board),” Mediratta was quoted in a report by Reuters.
The Indian Gas Exchange is a subsidiary of the Indian Energy Exchange.
The exchange currently has intraday, dayahead, daily and fortnightly contracts.
Mediratta said that the pricing of the 3-6 month contract will be on the basis of global price benchmarks.
These contracts will also take cues from the Indian Gas Exchange’s own index, GIXI.
Payment cycle
Additionally, the new contracts will have a payment cycle of a fortnight.
The current contracts in contrast have a payment cycle of just two to three days, Mediratta said.
The gas exchange is also mulling over the introduction of green certificates for trading, according to the CEO.
The company’s decision would be in line with the Indian government’s desire to make the usage of 1% compressed bio gas mandatory for city gas sellers.
Mediratta added:
If a city gas distributor doesn’t have a CBG plant, they can buy these certificates.
Trading will also encourage compressed bio gas production.
According to a Reuters report, the Indian Gas Exchange has also signed an agreement with Austria’s Central Europeans Gas Hub to explore gas trading opportunities.
This would include trading of green gases such as hydrogen and methane.
The Indian government wants to increase the share of natural gas in its energy mix to 15% by 2030 from just a little over 6% currently.
Monthly gas trades rise
In December, gas volumes traded on the Indian Gas Exchange surged by 129% on a month-on-month basis to 5.7 million metric British thermal units (mmBtu), according to data from the exchange.
The higher gas volumes was attributed to an increase in international gas prices and a reduction in India’s Administered Price Mechanism (APM) gas allocation to city gas distributors.
Indian Gas Exchange is the only exchange in India, which conducts physical delivery of the commodity.
A total of 193 trades were executed during December, sharply up from 131 in November.
The majority of trades were executed in the daily contract format (57), followed by monthly and weekly contracts, which recorded 54 and 29 trades, respectively.
During October-December of last year, the exchange traded 16.2 million mmBtu of gas, which was 37% higher than the previous quarter.
India’s gas index
The Gas Index of India (GIXI) in December stood at $14.3 per mmBtu.
This marked a 10% rise from November.
The Indian Gas Exchange stated earlier this week that all spot international gas benchmark prices also registered increases compared with the previous month.
Global gas prices rose in the last few weeks due to concerns over lower supply.
Forecasts of colder than normal temperatures in the US and Europe also aided sentiments in the market.
Additionally, a transit deal allowing Russian gas to flow through Ukrainian pipelines came to an end on December 31.
Ukraine refused to renew the deal as it is currently embroiled in a war against Russia.
The end of the deal saw gas completely cut off from some of the regions in Europe.
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