Trading in natural gas spot market will soon commence in India. Domestic gas major Gail (India) Limited and national multi-commodity exchange NCDEX are signing an MoU to work jointly for developing a spot market for natural gas.The MoU will be signed shortly following which NCDEX’s online trading platform will be available to gas consumers of Gail for spot contracts of natural gas.Towards this, Gail and NCDEX have agreed to form a core team to design the natural gas market, risk management and the mechanism for clearing and settlement of natural gas and funds. The core team shall work with users to promote natural gas trading.Company officials said the parties have agreed to make all endeavours to commence trading in natural gas spot market within a month from the date of conclusion of work.While Gail is presently undertaking both gas marketing as well as gas transmission activities, it is required to separate its gas trading business from gas transmission activities. The regulatory framework also requires such unbundling of business in the interest of development of competitive gas industry.‘‘The timings of unbundling of businesses as well as the pattern of unbundling would be influenced by the final Petroleum and Natural Gas Regulatory Board Bill and gas pipeline policy. The unbundling pattern would need the approval of the board and GoI before its implementation,’’ a company official said.Traditionally, unbundling is a three-stage process. Initially, trading transmission activities are separated within the organisation. This is followed by creation of separate business units and then depending upon maturity of market, separate companies are set up for trading and transmission businesses.
