Indian Gas Exchange is awaiting approval from PNGRB before launching small-scale LNG trading. According to Rajesh Mediratta, chief executive officer of the Indian Gas Exchange (IGX), the exchange intends to introduce small-scale LNG contracts on its trading platform shortly and has applied for permission from the industry regulator, the Petroleum and Natural Gas Regulatory Board (PNGRB).
This will be the first time that supercooled or liquefied natural gas is exchanged for another commodity. The three-year-old IGX currently only allows trading in domestic and regasified natural gas.
Small-scale LNG contracts, according to Mediratta, will help consumers who live in places without natural gas pipelines connecting them.
He said that the idea should shortly receive approval from the PNGRB. While trading LNG is not prohibited in India, IGX must obtain regulatory license prior to starting any new contracts.
Small-scale LNG utilizes LNG directly in liquid form as opposed to the traditional method of regasifying it before using it as natural gas. Pipelines are required for the delivery of regulated LNG, or natural gas, to end users.
Small-scale LNG is supplied by cryogenic road tankers and is considered an alternate means of boosting natural gas consumption in places not served by a natural gas pipeline network.
Heavy commercial vehicles may run directly on LNG, which is seen as a diesel substitute in that market. Small-scale LNG is a good fit for the intentions of a few Indian oil and gas corporations to promote the direct use of LNG as a fuel for vehicles.
In India, road transportation of LNG carries about 0.7 million standard cubic meters per day (mscmd) at present, but over the next five years, that number is anticipated to increase to 5 mscmd, according to Mediratta.
The only physical delivery-based gas exchange in India, IGX, intends to begin offering small-scale LNG contracts for delivery from five LNG terminals: Dahaj, Dabhol, Hazira, Kochi, and Ennore. Additional terminals will be added in the future.
