The government plans to set up a natural gas trading hub by the end of 2018 to give a boost to the consumption of natural gas in the country. In such a gas trading hub/exchange (GTHE), natural gas can be traded, and supplied through a market-based mechanism in place of multiple formula-driven prices. for a network that could help better price discovery for domestic as well as imported gas, a hub is used as a central pricing point.
In this regard, crisil, global rating and research agency, has been roped in to assist the Petroleum and Natural Gas Regulatory Board (PNGRB) and the government. The PNGRB issued a statement that the government’s aim is to usher into a gas-based economy by increasing the share of natural gas in the primary energy mix of the country from current level of about 6 per cent to 15 per cent by 2030. Therefore, the focus is on increasing the availability of natural gas by increasing domestic production, encouraging the import of Liquefied Natural Gas (LNG), completion of national pipeline grid and quicker roll out of City Gas Distribution network in the country.
As per the current policy, government fixes the price of the bulk of domestically produced natural gas by using price prevalent in gas-surplus countries of US, Canada, UK and Russia.
To see the successful operation of the gas trading hubs in advanced countries, the Board would visit USA, UK and Russia. Thereafter, it would be decided whether the existing regulations should be amended or not.