FAQs for IGX Website

1. What is Indian Gas Exchange (IGX)?

The Government of India has envisaged ushering into a gas-based economy by increasing the share of
natural gas in primary energy mix of the country, from current level of about 6 % to 15%, by 2030. In order to
further boost the consumption of natural gas in the country, Government is considering the establishment of
a gas trading platform, where natural gas can be traded and supplied through a market-based mechanism
instead of multiple formula driven prices.

Indian Energy Exchange, the leading power exchange is delighted to present Indian Gas Exchange (IGX), the
first nation-wide automated natural gas trading platform equipped with cutting edge technology. IGX offers
neutral and transparent marketplace to buyers and sellers for trading in standardized natural gas contracts
enabling efficient and competitive discovery of gas prices in India.

2. Why Indian Gas Exchange, what are the benefits to buy or sell gas on IGX Platform?

o Transparency: Clear and transparent rules for participation

o Flexibility: Option to trade on any day, any duration (next day to one month)
o Delivery Facilitation: Option for Delivered transactions wherein Capacity booking facilitated by IGX for
delivered transactions.
o Competitive Pricing: Competitive prices resulting from participation from multiple buyers and sellers
o Payment Security: IGX acts as counterparty. Collateral and margining to secure payments to sellers.
o Ease of doing transactions: Trading @ fingertips. Web based platform enabling gas trading at a click.
3. Who can participate on IGX platform?

a. CGD entities
b. Major gas consuming industries- Fertilizers, Glass, Ceramics, Power, Steel, Chemical
c. Gas producers and marketers
d. Large Natural gas buyers, buying more than 50,000 cubic meter per day

4. Which type of transactions are offered on IGX Platform?

There will be two types of transactions:

a) Delivered Transaction: The IGX will facilitate the trade, physical delivery of Gas by booking the
necessary transmission facility, and financial settlement for the traded Contracts; and

b) 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.
5. What are the products offered on IGX Platform?

1. Day-Ahead-Market (DAM) for delivery on the next Gas day i.e. 6:00 am to 6:00 am (Gas Day) next day
2. Daily contracts for delivery on chosen days.
3. Weekly contracts for delivery on typically Monday-Sunday and other combinations of 7 days at a time.
4. Weekday contracts for delivery on defined week-days Monday to Friday.
5. Fortnightly contracts for delivery for a fortnight (1st - 15th and 16th - End of Month).
6. Monthly contracts for delivery for the entire calendar month (1st to End of Month).
 Graphical Representation of IGX products are shown below.

6. What are the trading window and trading hours of different products on IGX?

Trading window Trading window

Exchange products Trading hours (IST) Tenor
(Start) (End)

Day-ahead 10:00 – 12:00 1 Gas Day D-1 D-1

Daily 10:00 – 12:00 1 Gas Day D-10 D-2

Weekly 10:00 – 12:00 7 Gas Days D-4 D-2

Weekdays 10:00 – 12:00 5 Gas Days D-4 D-2

15-16 Gas Days D-10

Fortnightly 10:00 – 12:00 D-4
(1-15 & 16-EoM) (D Begin of fortnight)
D-10
Monthly 10:00 – 12:00 Calendar Months D-4
(D Begin of month)

7. 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
exchange trade
Buyer will Book pipeline capacity post-trade on the exchange
Buyer will Coordinates for nominations
Buyer will Settles imbalances of Seller also.
Exchange to collect Imbalance Charges from Seller
• Option2: Exchange as Shipper

Exchange will Sign uniform GTA with all POs.

Exchange will Book capacity based on trade and available pipeline capacities
Exchange will Coordinate for nominations
Exchange will Settle imbalances of Buyer/Seller

8. 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
the IGX platform.

9. 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.

10. 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.

P* Market
Cleared Price
(MCP)

Q* Market
Cleared
Volume (MCV)

In the graph shown above:

a) Demand curve is drawn by plotting the sum of purchase (buying) data (volume) against price. This
curve has a slope downwards.
 b) Supply curve is drawn by plotting the sum of sale data (Volume) against price. This 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.
11. How is the exchange trade being different from bilateral trade?

Bilateral Contractual Arrangement

Exchange Contractual Arrangement

*GSA: Gas Supply Agreement

*GTA: Gas Transportation Agreement

12. 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

Price INR/MMBTU

Matching Double-sided closed Auction

Trading hours 10-12 noon daily (as per trading calendar)

Physical hubs namely Dahej, Hazira & Kakinada.
Delivery point
Going forward more hubs to be added by IGX.
Option 1) Delivered transactions: Gas and Transmission Capacity together.
Delivery options
Option 2) Ex-hub transactions: Gas only, capacity to be arranged by Buyer.
Imbalance Through the exchange for delivered transactions
management Out of exchange for Ex-hub transactions