India’s premier energy exchange, IEX, wants to introduce trading in petroleum products, especially LNG in liquefied form (volumetric trading), as opposed to the conventional way of trading in energy content or BTU. IEX is in talks with ONGC and Reliance to get them to sell any ‘free gas’ other petroleum products, especially LNG in liquefied form.
“LNG in liquid form can be traded separately,” Rajesh Kumar Mediratta, the listed company’s director – strategy & regulatory affairs said. The conventional way of transporting LNG is to convert the liquid gas into gaseous form at a re-gasification facility at the terminal where LNG is imported and pipe the gas to customers. However, according to Mediratta, there are other ways of handling the fuel which provides an opportunity to IEX.
IEX’s gas platform saw trading of 9,600 mm Btu of gas in the first fortnight. Even though there is not much gas available for trading in the spot or short term market, much of the availability having been committed under long term contracts; the volumes could have been higher but for the closure of the Dabhol LNG terminal for the monsoons. Asked if IEX would start trading LNG brought into the Kochi terminal, Mediratta said that Kochi could become a hub once the Kochi Mangaluru gas pipeline was commissioned. Asked if the pipeline implied a jump in IEX’s business, Mediratta said that it was a big positive, but would take time because user industries would need time to shift from their conventional fuels to gas.
