Frequently Asked Questions
1. What is a gas trading platform?
Gas trading platform is an electronic gas trading platform. It facilitates buyers and sellers to come together and transact gas as the underlying asset. Its core function is to ensure fair and transparent transactions as well as efficient price discovery and dissemination of information to its stakeholders.
2. What is Indian Gas Exchange (IGX)?
Indian Gas Exchange Limited (IGX) is India’s first Natural Gas trading platform which provides a national level market to all participants for trading in gas. IGX facilitates automated trading where multiple buyers and sellers can trade for physical delivery of natural gas. IGX currently, offers spot and forward contracts at designated physical hubs. Being a neutral and transparent marketplace, IGX enables efficient and competitive discovery of gas prices in India.
3. Why Indian Gas Exchange, what are the benefits to buy or sell gas on IGX Platform?
- Transparency: IGX provides standard contracts in gas with clear and transparent framework of Rules and Regulations for its participants to trade on the electronic platform.
- Flexibility: Option to trade on any day, any duration (upto one month) contracts across different delivery points (hubs).
- Delivery Facilitation: Option for Delivered transactions wherein Capacity booking is facilitated by IGX for delivered transactions.
- Competitive Pricing: Competitive prices resulting from participation of multiple buyers and sellers
- Payment Security: IGX acts as counterparty financial guarantee. Collateral and margining to secure payments to sellers.
- Ease of doing transactions: Trading @ fingertips. Web based platform enabling gas trading at a click.
4. Is there any Statutory authority to regulate IGX?
At present there is no statutory authority to regulate trade / transactions happening on the IGX platform. PNGRB is in the process to draft the regulation for Natural gas trading hub / natural gas exchange in India. Whenever such a regulation will come in place, activities of IGX will be governed and regulated by such PNGRB regulations. IGX has drafted Market Rules and Bye laws which governs the functioning of the platform.
5. Who can participate on IGX platform?
- CGD entities
- Major gas consuming industries- Fertilizers, Glass, Ceramics, Power, Steel, Chemical
- Gas producers and marketers
- Large Natural gas buyers, buying 50,000 scmd is for those who are connected to CGDs, for others they should have minimum requirement 2500 scmd (100 mmbtu 1 lot size) and directly connected to trunk pipeline.
- Large gas traders
6. What are the Contracts offered on IGX Platform
|Day Ahead Contract||One day ahead contract available for trading today for next day’s delivery|
|Daily Contract||Daily contract will be for one day’s delivery period. Member can trade upto individual 9 days delivery contracts on a given day starting from T+2 day where T is the trade day and 2 is the delivery day|
|Weekly Contract||Weekly contract will be seven days delivery contract clubbed together starting from Monday to Sunday.
Exchange will also have weekly (seven delivery days) contracts based on calendar dates i.e. from 01 to 07, 08 to 14 etc.
|Week Day Contract||Week Day contract will be five days delivery contract clubbed together. This contract will not have weekends (Saturday and Sunday) rolled into them and will have delivery days from Monday to Friday|
|Fortnightly Contract||Fortnightly contracts will be total of fifteen days and rest of the month delivery contracts available for trading. In a month there will be two such contracts|
|Monthly Contract||Monthly contract will be one consolidated month delivery days contract|
7. What are the different HUBs (delivery points) offered on IGX Platform
Currently IGX will provide its contracts for Dahej, Hazira and Kakinada.
8. Which type of transactions are offered on IGX Platform?
There will be two types of transactions:
- Delivered Transaction: IGX will facilitate the trade, physical delivery of Gas by booking the necessary transmission facility, and financial settlement for the traded Contracts; and
- Ex-hub Transaction: The IGX will facilitate the trade and the financial settlement for the traded Contracts. The necessary transmission facility will be arranged by the Shipper.
9. What are spot gas and forward gas contract?
- Spot gas contract- Contracts for purchase or sale of gas for instant delivery on a specified spot date.
- Forward gas contract- A forward gas contract is a customized contract between two parties to buy or sell gas at a specified price on a future date.
10. What are the products offered on IGX Platform?
- Day-Ahead-Market (DAM) for delivery on the next Gas day i.e. 6:00 am to 6:00 am (Gas Day) next day
There will be two types of transactions:
- Day-Ahead-Market (DAM) for delivery on the next Gas day i.e. 6:00 am to 6:00 am (Gas Day) next day.
- Daily contracts for delivery on chosen days.
- Weekly contracts for delivery on typically Monday-Sunday and other combinations of 7 days at a time.
- Weekday contracts for delivery on defined week-days Monday to Friday.
- Fortnightly contracts for delivery for a fortnight (1st – 15th and 16th – End of Month).
- Monthly contracts for delivery for the entire calendar month (1st to End of Month).
Graphical Representation of IGX products are shown below.
11. What are the trading window and trading hours of different products on IGX?
Currently the market will be open for 2 hours starting from 10.00 am to 12.00 noon on all 365 days of the year.
|Exchange products||Trading hours (IST)||Tenor||Trading window (S)||Trading window (E)|
|Day Ahead||10:00 – 12:00||1 Gas Day||D-1 business days||D-1 business days|
|Daily||10:00 – 12:00||1 Gas Day||D-4 business days||D-4 business days|
|Weekly||10:00 – 12:00||7 Gas Day||D-5 business days||D-5 business days|
|Week Day||10:00 – 12:00||5 Gas Day||D-5 business days||D-5 business days|
|Fortnightly||10:00 – 12:00||13 – 16 Gas Days (1-15 and 16-EoM)||D-5 business days||D-5 business days|
|Monthly||10:00 – 12:00||Calendar Month||D-9 business days||D-9 business days|
12. Who will sign Gas Transportation Agreement (GTA), Capacity Tranche (CT)?
IGX is offering two options for taking care of transportation facilities.
- Option1: Buyer as Shipper
Buyer will Sign GTA with concerned Pipeline Operators (POs) / use already signed GTA with pipeline operators for trade Buyer will Book pipeline capacity post-trade on the trading platform
Buyer will Coordinate for nominations
Buyer will Settle imbalances of Seller also.
IGX to collect Imbalance Charges from Seller
- Option2: IGX as Shipper
IGX will Sign uniform GTA with all POs.
IGX will Book capacity based on traded volume and available pipeline capacity
IGX will Coordinate for nominations
IGX will Settle imbalances of Buyer/Seller
13. Are there any additional requirement of pipeline connectivity and / or metering arrangements for trading on IGX platform?
No, there are no additional or new requirement of pipeline connectivity and / or metering arrangements. Buyer can continue with existing arrangements of pipeline and / or metering arrangements and can trade on IGX platform.
14. What is Bilateral Trade (Negotiated Trade)?
Bilateral trade or clearing trade is trade exclusively between two parties (Seller and Buyer). Seller can give a Matching Price, which must be Accepted by the Buyer.
15. How is the market clearing price determined ?
Prices are governed by the principal of Demand Vs Supply at IGX platform. MCP Is the price arrived at after considering all valid purchase and sale bids.
All Purchase & Sale bids are aggregated to trace a demand supply curve.
An example for calculation of Market Clearing Price (MCP) & Market Clearing Volume (MCV) is given below.
In the graph shown above:
a) Demand curve is drawn by plotting the sum of purchase (buying) data (volume) against price. This step curve has a slope downwards.
b) Supply curve is drawn by plotting the sum of sale data (Volume) against price. This step curve has a slope upwards.
c) These two curves intersect at a point. This is the point of equilibrium. At this point price for both buying and selling is same.
d) If a perpendicular is drawn from point of equilibrium to price axis i.e. Y axis it will meet at a point on Y axis. Price representing this point is market clearing price (MCP)
e) If a perpendicular is drawn from point of equilibrium to volume axis i.e. X axis it will meet at a point on X axis. Volume up to this point represents Market clearing volume.
f) All sale bides having price less than or equal to MCP value and all purchase bids having more than or equal to MCP value will be cleared for trade.
16. How is trade on trading platform different from bilateral trade?
*GSA: Gas Supply Agreement
*GTA: Gas Transportation Agreement
17. Salient Features of Natural Gas Trading on IGX
|Platform||Automated system for trading, delivery and financial settlement|
|Entities||Physical Buyers and Sellers can trade as Member or Client
Sellers – to put bid for sale of gas at delivery point (post re-gas)
Buyers – to put bid for buying gas at delivery point
|Delivery||All trades for firm delivery. Non-transferable.|
|Min lot size||100 MMBTU|
|Matching||Double-sided Closed Auction|
|Trading hours||10-12 noon daily (as per trading calendar)|
|Delivery point||Physical hubs namely Dahej, Hazira,Dabhol & Kakinada.
Going forward more hubs to be added by IGX.
|Delivery options||Option 1) Delivered transactions: Gas and Transmission Capacity together.
Option 2) Ex-hub transactions: Gas only, capacity to be arranged by Buyer.
|Imbalance management||Through IGX for delivered transactions
Out of IGX platform for Ex-hub transactions
18. Types of membership on IGX?
There are two types of membership
- Full Members: Full members will be able to trade both on their own behalf and on their clients’ behalf. These members will settle their financial obligation (trades on IGX platform) directly with IGX.
- Trader Members: Trader members will be able to trade and clear only on their clients’ behalf.
- Client: A client is an entity who has been registered with IGX through a Member as a Buyer/Seller. The Client has to settle their financial obligation through their respective Members.
19. Who is a Client?
A client is an entity who has been registered with IGX through a Member as a Buyer/Seller. The Client has to settle their financial obligation through their respective Members.
20. Who can become a member?
Following entities are eligible to become a Member of IGX:
- Proprietor Firm
- Registered Partnership Firm
- Private Limited Company
- Public Limited Company
- Government owned Entity
For more details, please visit: /documents/Market Rules
21. What is fee structure for members and clients on IGX?
|Particulars||Registering as a Full Member
(Amount in INR Lacs)
|Registering as a Trader Member
(Amount in INR Lacs)
|Registering as a client of a Member
(Amount in INR Lacs)
|1. Member Fees*|
|Security Deposit (One Time)||25||25||N.A.|
|Membership Annual Fees||5||5||N.A.|
|2. Client Fees*|
|Client admission fee||N.A.||N.A.||Nil|
|Client Annual Fee||N.A.||N.A.||1|
*excludes applicable taxes
22. What is the lock in period for initial fee security deposit?
Lock in period of security deposit is 1 year.
23. In what all designated banks a Member can open their settlement account?
Along with the name of the banks please provide the detail of the page where there contact details are given, saying for more detail visit: https://www.igxindia.com/clearing-banks/
24. What is the minimum volume to be traded on IGX platform?
100 MMBTU is the minimum volume traded on the IGX platform.
25. What is the process required to be followed for membership of IGX?
- To become a member:
- A person who desires to become a Member of IGX must submit a Membership Application Form to IGX along with a Membership Undertaking duly executed by the applicant. An application must be in the prescribed Membership Application Form and contain the information specified by IGX and must be accompanied by pre-specified applicable fee.
- The admission to Membership shall be at the sole discretion of IGX. IGX may appoint a Committee, if it considers appropriate, to review and consider the application and make recommendation to IGX on the application filed by the person.
- IGX may, within five (5) Business Days of receiving an application, ask the applicant to provide further information or clarification in support of the application. If such a request is made, the application shall be deemed to have been submitted by the applicant when the further information or clarification is provided to the IGX’s satisfaction.
- As a condition to being admitted as a Member of IGX the person applying for Membership shall pay the fees and charges, including all securities, deposits guarantees as may be decided by IGX from time to time.
- IGX must accept or refuse an application for membership within fifteen (15) business days of receipt of the application or, if later, receipt of any additional information or clarification, if any.
- To become a client:
- An entity which desires to become a Client on IGX, is required to fill the registration form which shall be duly recommended and authenticated by the Member through which the Client is submitting its application.
- The Member must submit the form to IGX together with a Client registration form which shall be deemed to be the Member Client Agreement duly signed by both the Member and the Client.
- Under the Client registration form, the Client shall provide the delivery details for the transactions to be undertaken by it on the GTP including the connectivity with the hubs and the availability of GTA from such hubs/ Entry Points. Where the Client has an existing GTA for the hubs/ Entry Points selected by it, all orders placed by such Client from such hubs/ Entry Points shall be deemed to be considered as Ex-Hub Transactions.
Please visit our Market Rules for more details https://www.igxindia.com/documents/Market Rules
26. What are the requirements relating to transfer of membership?
Please visit: https://www.igxindia.com/documents/Market Rules
27. What is the required documentation for registering a client under a Member?
Please visit: https://www.igxindia.com/documents/Market Rules