NCDEX, GAIL to develop gas trading platform

The National Commodity and Derivatives Exchange Limited (NCDEX) and Gail Ltd signed a memorandum of understanding (MoU) today to enable both organisations to jointly work towards development of a spot market for natural gas in the country.

Under the MoU, NCDEX would make available an on-line trading platform to Gail clients to trade in spot natural gas contracts.

The two also agreed to jointly educate stakeholders about the natural gas trading platform.

The pact was signed by the director (marketing) of GAIL, U D Choubey, and the chief executive officer and managing director of NCDEX, P H Ravikumar.

A core team will be formed to design the contracts, risk management processes and the clearing and settlement mechanism.

The team will collaborate with users to promote natural gas trading.

The managing director and CEO of NCDEX, Ravikumar, said, "This tie-up with GAIL is very significant for NCDEX as it marks a major step in the energy sector."

GAIL has contributed immensely to the nation's gas-based economy with a countrywide presence of pipelines, plants and marketing network."

He added the collaboration would leverage the synergies between the two organisations.

Trading is expected to begin within a month of completion of all the groundwork.