NTPC signs new KG deal

The state-owned NTPC on Tuesday agreed to sign a contract with Reliance Industries to buy gas from D6 block in KG basin for its power plants that are not part of the dispute, according to a senior petroleum official.

The gas for these power plants will be bought at government approved price of $4.20 per million British thermal units (mmBtu).

These power plants are located at Auraiya, Anta, Dadri and Faridabad. The agreement will be for 0.61 million metric standard cubic meters of gas a day (mmscmd).

The gas is expected to flow by December .

However, the agreement will not involve two power plants at Kawas and Gandhar, in which the NTPC is locked in a legal battle with RIL. The NTPC and RIL are engaged in a legal battle over “failure” of Mukesh Ambani-firm to honour its 2004 bid to supply 12 mmscmd of gas to expansion projects at these sites at a price of $2.34 per mmBtu.

RIL says the contract was not concluded. In 2007, the government had set a price of $4.2 per mmBtu for the RIL’s gas from D6 block in KG basin. NTPC has also agreed to pay $0.135 per mmBtu marketing margin to RIL. NTPC and Anil Ambani’s Reliance Natural Resources Ltd have been protesting the levy of marketing margin on the gas sale, arguing that there is no marketing involved allotment of gas from the KG Basin. The petroleum ministry had called a meeting to review unsigned gas sales and purchase agreement.

Besides NTPC, five companies — including ONGC and HPCL —will sign the gas sale purchase agreement with Reliance Industries, the petroleum ministry official said.

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