IGX launches ssLNG contracts to take gas to remote areas

Mumbai: The Indian Gas Exchange (IGX) has launched contracts of Small-Scale Liquefied Natural Gas (ssLNG) on its platform, said an official statement on Wednesday. “The Indian Gas Exchange (IGX) having received approval from the Petroleum and Natural Gas Regulatory Board (PNGRB) launched contracts of Small-Scale Liquefied Natural Gas (ssLNG) on its platform. This move marks a significant step towards addressing the demand for natural gas in areas that are not connected to the national gas grid,” said the statement.

PSU Watch is now on Whatsapp Channels. Click here to join

Growing demand for ssLNG contracts from industries, CGD companies: IGX

The introduction of ssLNG contracts on IGX aims to address the growing gas demand from industries and CGD (City Gas Distribution) companies that do not have access to pipeline networks. Through ssLNG, they can now procure liquefied gas through LNG tankers at competitive rates under daily, fortnightly and monthly contracts. Initially, this contract is launched at Dahej & Hazira LNG Terminals. Later, it will be launched at other terminals namely Dhamra, Mundra, Ennore, Kochi, and on-land ssLNG stations at Vijaipur.

Speaking at the occasion, Anjani Kumar Tiwari, Member, PNGRB said, “Small-scale LNG serves as the cornerstone for our gas-based economy, enabling us to expand our reach beyond traditional pipelines. On the supply side, it can bring gas from remote and difficult fields, and on the demand side, it can help an industry source gas which is not connected to the gas grid. With this vision, we provided approval to IGX for launching ssLNG contracts on their platform. PNGRB endeavours to be a facilitator to support the growth of ssLNG in India by providing a comprehensive regulatory framework. We will also be continuously evaluating the present regulations and making amendments to support the industry in navigating challenges.”

DK Sarraf, ex-Chairman of PNGRB, said, “While pipelines stand as the optimal means for gas transportation, the geographical expanse of our nation poses challenges in reaching every corner. Small-scale LNG emerges as a solution, bridging this gap and enabling customers to access the advantages of natural gas, thus facilitating a transition towards cleaner energy sources. I extend my sincere compliments to IGX for collaborating with PNGRB in launching ssLNG in India. Together, we can pave the way for widespread adoption of small scale LNG and create a cleaner, more sustainable energy future for all.”

Demand for road-transported LNG projected to increase substantially: IGX MD

Commenting on the development, Rajesh K Mediratta, MD & CEO, Indian Gas Exchange said, “We envision IGX providing marketplaces for competition, flexibility and transparent price discovery. The introduction of ssLNG contracts is to fill the void in ssLNG space. With the demand for road-transported LNG projected to increase substantially over the coming years, our initiative will provide city gas distribution networks, industries & LNG dispensers a competitive gas pricing that will optimise their costs. By facilitating the trading of ssLNG contracts, we are not only enabling the efficient transportation of larger volumes of natural gas via trucks but also widening access to a cleaner fuel across the country.”

Natural gas is primarily supplied through pipelines in the country. As a result, industries and commercial establishments without access to the grid primarily rely on trucks for LNG transportation. The demand for road-transported LNG is projected to increase to 5 MMSCMD over the next five years. “ssLNG contracts present a win-win situation for both the buyers as well as sellers. It would serve as a platform for sellers, who can come and trade LNG. Transporting natural gas in liquefied form via trucks will allow larger volumes to be transported, potentially making it economically viable for buyers not connected to pipelines. Further, it will also ensure a transparent and fair procurement process with enhanced payment security,” said the statement.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)