Indian Gas Exchange
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Subject: Economy
Context:
Indian Gas Exchange (IGX), India’s first gas exchange was launched
Concept:
- The IGX is a digital trading platform that will allow buyers and sellers of natural gas to trade in both spot market and in the forward market for imported natural gas.
- It will facilitate transparent price discovery in natural gas, and facilitate the growth of the share of natural gas in India’s energy basket.
- The price of domestically produced natural gas is decided by the government. It will not be sold on the gas exchange.
- The exchange also allows much shorter contracts for delivery on the next day, and up to a month while ordinarily contracts for natural gas supply are as long as six months to a year.
Background:
- Domestically produced natural gas currently accounts for less than half the country’s natural gas consumption while imported LNG accounts for the other half.
- LNG imports are set to become a larger proportion of domestic gas consumption as India moves to increase the proportion of natural gas in the energy basket from 6.2% in 2018 to 15% by 2030.
Natural gas:
- Natural gas is a mixture of gases which are rich in hydrocarbons. Natural gas reserves are deep inside the earth near other solid & liquid hydrocarbons beds like coal and crude oil.
- Natural gas is mainly used as fuel for generating electricity and heat.
- Natural gas in compressed form is used as fuel for vehicles which is known as CNG. This is used for making fertilizers also, mainly ammonia.
- Russia, USA and Canada are major producers & consumers.
- For transporting, two variants are used – LNG for cross countries exchange and CNG for domestic purpose.