The Indian Gas Exchange (IGX), India’s first national-level gas exchange for physical delivery of natural gas, has launched of GIXI – the first-ever nationwide price index to reflect the benchmark natural gas price for India. Launching the IGX Gas Price Index, Tarun Kapoor, former petroleum secretary and adviser to the Prime Minister of India, said, “The domestic natural gas market is growing at a fast pace, in line with the Prime Minister’s vision of increasing the share of natural gas in the primary energy consumption basket to 15 per cent by 2030. More volume trading on the exchanges, especially by the city gas distribution sector as well as fertiliser and power sector companies, will further open up the gas market in India. I congratulate the IGX for achieving significant volume growth over the last two years.”
At the IGX, over 44.7 billion mmBtus (1.1 billion cubic metres) of gas have been traded since inception. Over 1,900 transactions were executed on the exchange, with all matured transactions resulting in deliveries. The IGX currently commands nearly 15 per cent of the spot market share in India.
The IGX Price Index is developed with the purpose to derive a single price for the country in line with international benchmarks such as Japan Korea Marker, Henry Hub, West India Marker and Title Transfer Facility, which are currently representative of the prices in their respective coverage regions. The IGX Price Index is calculated for various hubs and delivery points with IGX prices being discovered based on actual deliveries making it reflective of the true market situation.
Kirit Parikh, chairman, IRADe and former member, Planning Commission, said, “I am delighted to note the impressive progress by the IGX in the past two years. A competitive gas market, driven by large volumes traded by buyers and sellers, will pave the way for a gas-based economy. I congratulate the IGX for launching the Gas Price Index, which will reflect market-based competitive prices benefiting all stakeholders to trade gas in the country.”
Atanu Chakraborty, IAS, chairman, ACE, said, “I congratulate the IGX for trading good volumes. The efficient market design and discovery of uniform prices through the exchange helps mitigate the price distortion caused by multiple price regimes existing in the country. The volume-weighted price index launched by the IGX is a great development, and I hope that it will reflect the market volatility and help develop the gas futures’ market by indicating a transparent price for market instruments.”
Congratulating the IGX for evolving as a key player in India’s nascent gas sector, D.K. Sarraf, former chairman, Petroleum and Natural Gas Regulatory Board (PNGRB), and former chief managing director, Oil and Natural Gas Corporation, said, the IGX, with its world-class technology-based platform, is promoting the growth of natural gas in the country by making it accessible to all market players. Acknowledging transparent and competitive prices discovered at the exchange, the Department of Fertilisers has encouraged fertiliser companies to buy gas from the IGX. The IGX Gas Price Index, or GIXI, can serve as a reference point for market gas price in India, and going forth, can be used to determine the forward and futures gas price index as well.”
Acknowledging the IGX’s contributions, A.K. Tiwari, member, PNGRB, said, “The gas exchange has done tremendously well as the mechanism that allows participants to discover price transparently and ultimately boost the transition towards a gas-based market economy. The PNGRB is working towards realising the goal of “One Nation, One Grid, One Tariff”, and the IGX has a big role towards realising this mission. Going forth, the IGX may evolve into a South Asian Gas Exchange, given the huge volume potential in the region.”
Rajesh Kumar Mediratta, managing director and chief executive officer, Indian Gas Exchange, said, “We are excited and honoured that the IGX is acting as an enabler to India’s transition towards a gas-based economy, by benefiting gas producers, transporters, marketers and consumers. Competitive price discovery enabled by the IGX is helping fill the demand-supply gaps and stimulating investments in the country’s gas value chain. I am confident that the IGX Gas Price Index will help discovery of a single and credible price for the country, one that is reflective of local demand and supply conditions”.