India is working on an ambitious plan to build a natural gas trading hub that could aid better price discovery for domestic as well as imported gas, with the ultimate objective of becoming Asia’s pricing hub that could compete with Singapore, Shanghai or Tokyo.
“India can be a huge gas consumer. But for the local gas market to mature, we must have market-driven pricing. The setting up of a hub will take us towards that,” a source with direct knowledge of the matter said. India, the world’s fourth-biggest importer of liquefied natural gas (LNG), does not have a free market regime for gas. Natural gas is sold on the basis of a government-mandated formula that links the local price to international rates, while most long-term import contracts are linked to crude oil Read more