The government has not asked the National Thermal Power Corporation to buy gas from the Reliance Industries-operated Krishna-Godavari gas field at $4.2 mmBtu - a price that it has fixed for others - minister of state for power Bharatsinh Solanki assured the Rajya Sabha on Monday.
In fact, sate-run NTPC had requested the power ministry for allocation of additional gas to meet the current gas shortage at its existing stations from KG-D6 Block out of the 18 mmscmd (million standard cubic metres per day) gas allocated to the power sector by the government, he said.
Solanki said the government had allocated 2.67 mmscmd from Reliance's D6 block, off the country's east coast, to NTPC. The gas allocated to NTPC would be sold at a base price of $4.2 mBtu, but NTPC has separately gone to court saying Reliance Industries had backed out of a deal after winning a bid in 2004 to supply natural gas at $2.34 per mBtu.
The 2.67 mmscmd gas supply to existing power plants of NTPC had been approved by the government at a base price of $4.2/mBtu "without prejudice to NTPC's suit in the Bombay High Court" relating to Kawas II and Gandhar II projects in western India, Solanki said.
Solanki said the government has not issued any instruction to NTPC for signing of the gas sale and purchase agreement (GSPA) with RIL based on the tenders invited by the former in 2004.
Meanwhile, an Economic Times report said the power ministry has asked the petroleum ministry to direct Reliance Industries to reserve 12 mmscmd gas for NTPC's Kawas and Gandhar plants till the court gives its verdict on the dispute between the two companies.
The new proposal aims to protect the interests of the power sector PSU even as RIL delivers gas to other consumers, including Reliance Natural Resources (RNRL) as per directions of the Bombay High Court.
"The power ministry has asked petroleum ministry to either direct RIL to reserve gas for NTPC or ask it to sign a GSPA with power PSUs for the disputed 12 mmscmd of gas. In any case, both the options would become operational only after the court gives a final verdict on the dispute," the paper quoted a government official as saying.