"Natural gas demand in the country is expected at 166 metric million standard cubic meters (mmscmd) per day against domestic supply of 98 mmscmd, leaving a huge gap which needs to be filled with large imports at international rates," said Mr Rajesh Wagle, VP-commercial, Mahanagar Gas Limited (MGL).
Looking at the liquidity in the market, several distribution companies have started to look at the option of buying natural gas on the Henry Hub or crude oil price basis.
As Henry Hub natural gas and crude oil cushioning is the most recognised and established platform, increasing number of companies can now utilise these reference market, by using MCX natural gas and crude oil contracts. As these energy commodities are highly volatile in nature, physical players are able to utilise MCX platform to hedge their price risk against high volatility.
India is currently importing natural gas from various origins and it is around 22% of the domestic consumption. This figure is likely to grow to 33% by 2010-2011. Private sector supplies meet 27% of domestic requirement and are expected to increase to 64% by 2010-11.
