IGX launches small-scale LNG contracts, expanding gas availability beyond national grid

Close on the heels of receiving approval from the Petroleum and Natural Gas Regulatory Board (PNGRB), the Indian Gas Exchange (IGX) has launched contracts for small-scale Liquefied Natural Gas (ssLNG) on its platform. This strategic move aims to address the demand for fuel in areas not connected to the national gas grid, offering new avenues for gas procurement and distribution.

IGX's initiative to address gas demand

IGX has introduced small-scale LNG contracts to cater to the increasing gas demand from industries and City Gas Distribution (CGD) companies lacking access to pipeline networks. These contracts offer flexible procurement options, allowing buyers to obtain liquefied gas through LNG tankers under daily, fortnightly, and monthly agreements. Initially launched at Dahej and Hazira LNG terminals in Gujarat, this initiative will later extend to other terminals across the country, including Dhamra, Mundra, Ennore, Kochi, and on-land ssLNG stations at Vijaipur.

Challenges and solutions in gas transportation

While natural gas is primarily supplied through pipelines, industries and commercial establishments without pipeline access rely on LNG transportation via trucks. The demand for road-transported LNG is projected to rise significantly over the next five years. Small-scale LNG contracts offer a viable solution, enabling sellers to trade LNG and facilitating larger volumes transportation economically.

Regulatory support and industry perspectives

PNGRB members emphasize the importance of small-scale LNG in expanding the gas-based economy beyond traditional pipelines. Anjani Kumar Tiwari highlights PNGRB's role as a facilitator, providing a regulatory framework to support the growth of ssLNG in India. Former chairman D K Saraf underscores the significance of small-scale LNG in bridging geographical gaps and transitioning towards cleaner energy sources.

Rajesh K Mediratta, MD & CEO of Indian Gas Exchange, envisions IGX as a marketplace for competition, flexibility, and transparent price discovery. The introduction of ssLNG contracts aims to optimize costs for city gas distribution networks, industries, and LNG dispensers while widening access to cleaner fuel across the country.

IGX's launch of small-scale LNG contracts marks a significant milestone in addressing the demand for natural gas beyond the national grid. With regulatory support and industry collaboration, this initiative paves the way for a more accessible and sustainable gas supply chain across India.