Natural gas futures trading begins on MCX

11 July 2006

Mumbai: MCX (Multi Commodity Exchange of India) announced yesterday the launch of natural gas futures trading.

Murli Deora, Honourable Union Minister for Petroleum and Natural Gas inaugurated the commencement of trading in the contracts.

According to the Expert Committee Report on Integrated Energy Policy, 2005 the share of natural gas in energy consumption is expected to increase from 9 per cent at present to almost 23 per cent in the next 25 years.

The supply of gas from the private sector, which is currently at 27 per cent, is also expected to increase to 64 per cent by 2011.

Deora said: "Natural gas is gaining importance as an alternative source of clean and competitive energy in view of the sky-rocketing crude oil prices."

The BP Statistical Review of World Energy, 2006 shows that India's natural gas consumption in 2005 was 36.6 billion cubic metres, surpassing the production capacity of 30.4 bcm. Currently 22 per cent of India's natural gas is imported.

MCX Managing Director and CEO, Jignesh Shah, said: "We intend to provide the Indian energy market participants an opportunity to trade in natural gas rupee-denominated contracts that are linked to global price benchmarks."

MCX is initially launching contracts for August and September on ex-Hazira delivery basis with daily price limits of 4 per cent.

Natural Gas is used mainly in the industrial, commercial, transport and domestic sector.

According to the Ministry of Petroleum and Natural Gas, the power and fertiliser sector are the largest consumers of natural gas in India.