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Indian Gas Exchange (IGX) to be Launched Today; Know Complete Details of Natural Gas Trading

Tooba Maher
Tooba Maher

We are ready to get our maiden gas trading platform. Yes, India will today (June 15, 2020) get its very own natural gas trading platform that will help discover local market price for gas by transparent demand-supply matching. Dharmendra Pradhan, Oil Minister will launch the Indian Gas Exchange (IGX) to kickstart natural gas trading, as PTI reported.

Here we will inform you about few important things you need to know about Indian Gas Exchange (IGX)?

Indian Gas Exchange (IGX): Important Details

1. Indian Gas Exchange or IGX is India's first automated national level trading platform to promote and sustain an efficient & robust gas market and foster gas trading in the country.

2. It will feature multiple buyers & sellers trading in spot and forward contracts at designated physical hubs.

3. Indian Gas Exchange is a neutral and transparent market-place where both buyers and sellers will trade gas as the underlying commodity. It will enable efficient and competitive discovery of gas prices.

4. It is to be noted that the contracts traded at IGX are for compulsory specific physical delivery and settlement of the trade is subject to the condition that such contracts are non-transferable in nature and without any netting-off thereby.

IGX Objective:

  • The most important objective is to maintain market integrity. However, initially trading is proposed to commence at the physical hubs at Hazira and Dahej in Gujarat and Oduru/Kakinada in Andhra Pradesh.

  • It will help to introduce new hubs. For price discovery, IGX will invite time scheduled bids from buyers and sellers. A price discovery mechanism will be run to settle delivery of gas.

  • It will be offering 6 market products i.e. day-ahead, daily, weekly, weekdays, fortnightly and monthly.

    Few of these contracts will be available on Day 1 of trading from June 15, while some will be introduced later.

  • It has successfully held 3 mock trading sessions i.e. on March 20, April 9 and May 21 with significant participation from the industry.

  • This technology platform gives rapid, accurate, secure & efficient trade, which caters to the requirements of pre-and post-trade functionalities with the capability to handle complex orders.

  • IGX bidding is done in an anonymous manner. Here, the buyer and seller do not know their counterpart.

  • Here, the price discovery will be either by double-sided closed auction with uniform price mechanism or by continuous trade mechanisms. In a double-sided closed auction, the participants input their bids to buy or sell at a specific price point. Also, the market will determine one single uniform market clearing price.

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