In­dia To Launch Gas Trad­ing Hub

Chemical Industry Digest - - News & Views -

The gov­ern­ment plans to launch a nat­u­ral gas trad­ing hub, cre­at­ing an In­dian gas bench­mark which will spark a surge in con­sump­tion of the cleaner burn­ing fuel. Pe­tro­leum and Nat­u­ral Gas Reg­u­la­tory Board (PNGRB) has also sought bids to hire a con­sul­tant to help de­velop a reg­u­la­tory frame­work for op­er­a­tional­is­ing the gas hub.

This is to fur­ther boost the con­sump­tion of nat­u­ral gas in the coun­try, where nat­u­ral gas can be traded and sup­plied through a market based mech­a­nism in­stead of mul­ti­ple for­mula driven prices, which in turn will boost the share of nat­u­ral gas in In­dia’s en­ergy mix to 15% by 2030, from over 6% now. The planned gas hub would have to be lo­cated near In­dia’s main gas pipe­line net­works, most likely in the states of Gu­jarat, Ma­ha­rash­tra or Andhra Pradesh, where more ad­vanced in­fra­struc­ture is lo­cated. Cur­rently, In­dia im­ports gas from var­i­ous sources. June saw the first cargo of Rus­sian liq­ue­fied nat­u­ral gas, from Gazprom, reach its shores (cheap­est LNG).

An­a­lysts see In­dia’s mor­ph­ing into a gas-hub as a slow process. As In­dia lacks some of the un­der­ly­ing reg­u­la­tion in how the market works and mak­ing sure there’s good third­party ac­cess and com­pe­ti­tion. The Shang­hai gas ex­change is a cau­tion in this re­spect, that has a lot of dif­fer­ent con­tracts, and yet, no one is quite sure what they mean and who is trad­ing them. And there is a pos­si­bil­ity that In­dia could go down the same route.

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