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India will soon have a natural gas trading platform, which could lead to market-determined pricing of gas. At the end of the India Energy Forum by CERAWeek, Minister for Petroleum and Natural Gas Dharmendra Pradhan said: “We will soon move the Cabinet to seek approval for setting up a gas trading platform.”
This will be similar to global hubs such as Henry Hub of the US and National Balancing Point of the UK.
“Both imported natural gas (liquefied natural gas or LNG) and domestically produced gas will be traded at the hub. This will enable market determination of the Indian price for natural gas,” a government official told BusinessLine .
Pradhan said: “The gas exchange is in the interest of the Indian consumer. The world average of gas consumption is 24 per cent, while in India it is 6-7 per cent.” In future, all new production will have marketing freedom, Pradhan said.
The Minister also said that in the next 10 years, there will be scope for $300 billion worth of hydrocarbon projects in India. The government, he said, will also create a “think-tank” that will help achieve import reduction and transition to a gas-based economy.
The think-tank will have an advisory role and will look at, among others, gas infrastructure, a financing model for projects, and price competitiveness, he added.
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