RIL-NTPC dispute over D6: Mukesh Ambani now trying to settle another long pending dispute with state owned NTPC out of court

It seems to be the season for settling gas disputes for Mukesh Ambani led Reliance Industries.After getting a Supreme Court decision in his favour in his fight against Anil Ambani's RNRL, Mukesh Ambani is now trying to settle another long pending dispute with state owned NTPC out of court – a matter currently pending at the Bombay High court.

Sources have told NDTV that Reliance Industries is all set to initiate an out of court settlement with NTPC and expects the dispute to be resolved in the coming 3-4 months time. RIL is ready to supply gas to NTPC at the 2004 bid price of $2.34 per mBtu, if the government approves the same.

But here’s the twist! In a recent communication to the government, Solicitor General Gopal Subramanium has said that NTPC can be treated as a special case and the government can ask RIL to supply gas at $2.34 per unit as under the production sharing contract there are provisions to supply gas to PSU firms at concessional rates.

Thus, while RNRL lost the case on issue of pricing, NTPC by virtue of being a government company may manage to get gas at $2.34 per unit. So is the Solicitor General's opinion to the power ministry for RIL to seek an out of court settlement.

While RIL declined to comment, sources say the main dispute was never about the price of gas but the liability clause in the agreement between RIL and NTPC. RIL wanted to cap the liability at 125 per cent, while NTPC has insisted on an unlimited liability in case RIL fails to supply gas from KG-D6.

The ball is now back in EGOM’s court on the pricing issue. A settlement on the liability clause is also likely to be reached soon between the two companies.Also with NTPC in the process of expanding its Kawas and Gandhar power plants, officials say it's just a matter of time, before this issue is settled.