GAIL buys 5% of IEX’s gas exchange

GAIL (India) Limited, India’s largest pipeline operator, said it has taken a 5% stake in Indian Gas Exchange or IGX.

It is not clear whether the investment is into fresh shares or whether the purchase is those of shares belonging to an existing shareholder. However, GAIL said it signed a share purchase and shareholders agreement (SPSHA) with Indian Energy Exchange Limited, the promoter and parent company of IGX, for acquisition of the 5% equity stake.

IGX, India’s first automated delivery-based gas trading platform, was launched in June 2020 and has a 25-year license to operate as a Gas Exchange.

GAIL is already a member of the exchange.

IEX, the parent, is a publicly listed company and the first and largest energy exchange in India.

It facilitates the on-demand sale and physical delivery of electricity, renewable power, renewable energy certificates and energy saving certificates.

IEX has been operating since 2008 and is also home to India’s largest power exchange.

“GAIL is already among the initial members of IGX and is pleased to be an equity partner of IGX,” said M V Iyer, Director (Business Development), GAIL.

“As the country leaps forward to build a sustainable energy economy, the partnership between GAIL and IGX is an endeavour towards further development of gas markets.”

India has a target of increasing the share of natural gas from around 6% at present to 15% of the energy mix.

GAIL offers liquid hydrocarbon transmission, LPG production & transmission, LNG regasification, petrochemicals, city gas, E&P, etc.

The government controlled company owns and operates a network of around 13,250 km of natural gas pipelines and commands ~ 70% market share in gas transmission and has a gas trading share of over 50% in India.

GAIL is strong dominant in India’s City Gas Distribution sector as well as in the Liquefied Natural Gas (LNG) market.