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Gas trading hub in India: A lot of learning ahead
Apr 16: Setting up a gas trading hub is not easy as countries such as China, Japan and Singapore have not been able to successfully put up their own hubs despite a lot of background work and enabling factors in place.
8Indian teams in charge of building a gas trading hub will have to begin with visits to the US or UK or Australia to figure out how it works in these countries and whether what works there will work in India.
8Studies and recommendations will be needed in putting together the regulatory framework in terms of pipeline infrastructure, ensuring interconnectivity of pipelines, tariff models and separation of transportation and sales paradigm in existing monopolies
8Standardized unbundled contracts must be the order of the day and working them out will not be easy.
8A lot of learning will be needed among Indian players before a hub can actually be designed.
8Capacity data disclosure and transparency will have to be the order of the day.
8Role of different players will have to be clearly defined and regulations laid down accordingly.
8What kind of market clearing mechanisms will be in place?
8How will price discovery be done?
8Many questions will have to be answered.
8One thing is for sure: A gas trading hub of the kind prevalent in the West will take many years before it can become a reality in India
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