The Hindu Business Line : ONGC, BPCL keen on trading in NCDEX natural gas futures

NATURAL gas seems to offer a better trading opportunity than crude oil. While big oil companies are yet to join the crude futures markets (floated by NCDEX and MCX), NCDEX's proposal to launch spot trading in natural gas has already evoked interest of the country's biggest oil and gas producer — ONGC.

Having entered into an MoU with GAIL for provision of gas transportation delivery mechanism, NCDEX is now waiting for formal approval by the GAIL board for launching the spot platform.

BPCL, a marginal player in the natural gas market, has also expressed interest in participating in such trading.

The commodity exchange has also firmed up plans for seeking approval of the Forward Markets Commission (FMC) for launching a derivatives market on natural gas once the spot trading gains momentum.

"We have been approached by NCDEX with a proposal for participation in natural gas trading. We are positive about it," an ONGC official said.

"Right now we do not have much of free capacity available for offering in the spot market. However, with more and more new fields expected to go for production in next few years, substantial volume may be available for exploring spot market price discovery in the future. Keeping all these things in mind we may make a small beginning now," he added.

The NCDEX Managing Director, Mr P.H. Ravi Kumar, admitted that ONGC had so far responded positively to its proposal.

He, however, mentioned that discussions were still in an early stage.

"Natural gas is fast emerging as the most preferred source of energy to the user industry. Further, at home, there is a trend to do away with the administered price and move to market price. Thus, we are hopeful that the producers would like to test the efficacy of our proposed spot trading platform," he said.

"We have plans to launch the derivative markets once the spot trading gains a reasonable volume," he added.

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