The ONGC subsidiary is being formed with the objective of sourcing, marketing and trading of natural gas, LNG business, Hydrogen enriched CNG(HCNG), etc, said the PSU
ONGC would be the second public sector company to invest in IGX after GAIL (India) Ltd
New Delhi: State-run Oil & Natural Gas Corporation (ONGC) has made two major announcements on Saturday — that it will set up a wholly-owned subsidiary for focussing on its gas and LNG business and it will pick up 5 percent stake in India’s maiden Indian Gas Exchange (IGX). The two major decisions received a nod from ONGC’s Board of Directors along with the oil behemoth’s December quarters financial results. The two decisions are significant in view of the emphasis placed by the government on the creation of a gas economy. The Ministry of Petroleum and Natural Gas is planning to increase the share of natural gas in the Indian economy from the current 6 percent to 15 percent by 2030.
ONGC gas subsidiary will source, market, trade gas
Commenting on the purpose of setting up a new subsidiary, ONGC said in the statement, “The Company is being formed with the objective of sourcing, marketing and trading of natural gas, LNG business, Hydrogen enriched CNG(HCNG), Gas to Power business, bioenergy/bio-gas/bio methane/other bio fuels business, etc.” The formation of the subsidiary is subject to necessary approvals, the statement added.
ONGC to pick up 5% stake in IGX
Conveying the decision to pick up a stake in IGX, ONGC said, “Board has approved acquisition of 5 percent equity in Indian Gas Exchange Ltd (IGX) as strategic investment. IGX is a subsidiary of IEX, India’s first and leading Power Exchange.” The oil PSU would be the second public sector company to invest in IGX after GAIL (India) Ltd which recently picked up 5 percent stake in the gas trading platform owned by Indian Energy Exchange (IEX). Presently, IGX has three strategic investors — Adani Total Gas, Torrent Gas and GAIL.
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“As an important stakeholder in the gas sector, it would be critical for ONGC to participate at the Gas exchange for development of gas sector. ONGC’s interests towards realising maximum value from its gas marketing efforts may be substantiated through this first gas trading platform in the country. It is expected that this partnership will play a role in achieving the government of India’s vision for increasing the share of natural gas from 6 percent to 15 percent in energy basket,” said ONGC in the statement.
IGX Ltd is presently India’s first and only authorised gas exchange, which provides an automated platform for trading of natural gas, covering wide range of products. With 15 members and more than 500 registered clients, the IGX offers a compelling alternative to the gas spot market in India by providing ease of trading, payment security and greater access to the market. It currently operates from three physical hubs — Hazira and Dahej in Gujarat and KG Basin in Andhra Pradesh.
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