Power minister Sushil Kumar Shinde has signalled a split in the power ministry’s efforts to secure interim gas supplies for NTPC Ltd from Reliance Industries Ltd (RIL) at $2.34 per million British thermal unit (mmBtu) pending a judgement in the ongoing legal dispute between the two companies in the Bombay high court over a gas supply contract. If the minister’s view prevails, then state-owned NTPC, which is controlled by the power ministry, will have to further delay its plans to expand power generation capacity by 2,600MW at its plants at Kawas and Gandhar.
Shinde said that “such a step (securing temporary gas supplies) is not possible as the empowered group of ministers (eGoM) has already taken a decision on the gas price to be $4.2 per mmBtu. That continues. There cannot be a change. The court decision is awaited.” The lawsuit between NTPC and RIL in the Bombay high court dates back to December 2005, with the point of contention being the existence and terms of a valid contract between the two. NTPC claims there is one in which RIL promised to supply 12 million standard cu. m a day (mscmd) of gas for the expansion of its Kawas and Gandhar power plants, both in Gujarat, for 17 years at a price of $2.34 per mmBtu. RIL claims there is no contract.
The minister’s comment comes at a time when NTPC has been lobbying, through the power ministry, with the petroleum ministry for supply of 12 mscmd of gas from RIL’s block (D6) in the Krishna-Godavari (KG) basin at $2.34 per mmBtu.The power ministry had previously claimed that the petroleum ministry had agreed, at a meeting held late last year at the residence of solicitor general Gopal Subramanium, that it would put a proposal before the eGoM to ensure an interim supply of 12 mscmd of gas at $2.34 per mmBtu.
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