India Gas Exchange launched, govt eyes 15% share of gas in energy mix
In a bid to gradually move towards deregulation of gas prices and enhance investment in gas infrastructure in India, Dharmendra Pradhan, Minister of Petroleum & Natural Gas on Monday launched its maiden gas exchange, India Gas Exchange.
The government seeks to increase the share of natural gas in its energy mix to 15 percent by 2030 from the current 6.2 percent. The gas exchange will be managed by India Energy Exchange.
“Gas exchange will help buyers and sellers and eventually help broaden the gas economy in India,” said Pradhan. “India is committed to becoming the growth centre of the global economy. Today’s launch of the India Gas Exchange will help us push investment in the gas infrastructure.”
He added: “The government is of the view that it should not be in the business of business and trading of gas will ensure move towards a market-driven formula for the pricing of gas. Petroleum and Natural Gas Regulatory Board (PNGRB) will soon notify tariff policy which will be important for transportation of gas.”
The delivery-based exchange will offer from a day to monthly trades, from Dahej, Hazira Hub in Gujarat, and Kakinada in Andhra Pradesh in the beginning.
With a focus on climate change and shift towards clean energy, it is expected that an increase in consumption of gas will be led by fertilizer, city gas distribution, industrial, petrochemical, and power industry in the coming years.
“We have a target of bringing gas at 15 percent of the energy mix of India from the current about 6 percent. There might be some teething issues like the management of terminal, gas flow in the course of deregulating gas prices, but I want to assure that the regulator PNGRB and government will work towards finding a solution” said Tarun Kapoor, secretary, Ministry of Petroleum & Natural Gas.
The aim is to bring flexibility, direct access, payment security, transparency, and reduced transaction costs for the stakeholders. The market-driven formula for gas pricing will be attractive for companies to increase gas production and investment-wise for the gas-based economy India is aiming for.