Indian Gas Exchange to launch truck-loaded LNG contract
Indian Gas Exchange (IGX) will soon launch a contract for supplying LNG via trucks, IGX director Rajesh Kumar Mediratta told NGW in an interview.
“We have been working on this new contract for some time and have had discussions with all the stakeholders. We have conceptualised the basic framework of the contract; how will it be traded, where will be delivery points be, what would be the lot size,” Mediratta said.
IGX will file an application with the Indian downstream regulator, Petroleum and Natural Gas Regulatory Board (PNGRB), in a week’s time. “We hope to get the approval for the launch of the contract and expect it to go live during the present quarter,” Mediratta said.
IGX was launched in 2020 and in May this year received approval from PNGRB to trade domestic gas on its platform. The exchange currently facilitates delivery-based trades in six different contracts such as day-ahead, daily, weekday, weekly, fortnightly and monthly.
Big scope for growth in the truck-loaded LNG market
The potential for growth in the Indian truck-loaded or small-scale LNG market is big, said Mediratta, given the lack of pipeline connectivity in the country.
In India, five LNG receiving and regasification terminals have LNG truck-loading facilities. The Dahej, Hazira, Ennore, Mundra and Kochi terminals have a combined 11 truck loading bases. These truck-loading bases can handle about 2.3mn m3/day of LNG.
“At present, only about 0.7mn m3/day of LNG volumes are being handled at truck loading bases of these terminals. We see robust growth ahead and it is expected that the volumes will increase to 5mn m3/day in the next five years. We expect that about 20-25% of these volumes will be traded on IGX,” he said.
In the immediate future, demand for small-scale LNG will be mainly driven by the city gas sector, industrial segment and long-haul transport segment.
“The city gas and the industrial units are large consumers of gas. The transportation sector is another promising area. It is expected that about 50 LNG stations will come up on India highways by 2024. In the years ahead railways, mining and LNG bunkering sectors are also expected to contribute to the growth,” he said.