The Hindu Business Line : NCDEX spot trading in natural gas on backburner

Spot trading platform in natural gas is proving to be a non-starter in India. Proposed to be launched by NCDEX in collaboration with GAIL this fiscal, the project seems to have been postponed for an indefinite period due to lack of availability of tradable surplus in natural gas.

The spot platform was mooted to discover the market prices for natural gas in the country. Unlike in crude oil, natural gas does not have a global price benchmark and differs from country to country depending on the local supply-demand scenario. GAIL had entered into an MoU with NCDEX for providing the support system for physical delivery of natural gas for the proposed trading platform earlier this year. The gas major had earlier also expressed keen interest in participating the trading.

Discussions still on

While both NCDEX and GAIL official sources maintain that they are discussing the relevant issues before launching such a platform, sources said that lack of availability of tradable natural gas forced GAIL to take a critical look at the viability of the proposed platform. GAIL was also yet to seek the board approval, which was mandatory for embarking on the project.

When asked about the status of the project a GAIL spokesperson said, "Consequent upon the MoU, GAIL will enter into an agreement with NCDEX after completing certain formalities, the discussions for which are going on."

Sources, however, confirmed that GAIL is now hardly showing any interest in implementing the project.

It may be mentioned that NCDEX was trying to launch the spot trading platform for more than a year. The commodity exchange had previously tried to rope in GSPCL, a major aggregator in the western region, as the service provider. The effort, however, proved futile as GSPCL too lost interest in the project.

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