Government to file application in SC to protect NTPC interest in KG basin gas row

In a move to protect NTPC's interest in securing gas from Reliance Industries Limited (RIL), the government intends to file an application in the Supreme Court (SC) to the effect that its pricing decisions on fuel are without prejudice to the public sector unit's case against RIL.

A ministerial panel headed by finance minister Pranab Mukherjee, today decided to clarify before the apex court that the state-run firm's case for sourcing gas from RIL should not be prejudiced by the $4.20 per mmBtu price fixed for RIL's gas.

RIL had committed to supply NTPC at $2.34 per mmBtu for fuel in 2004, the price at which the government says, RIL cannot supply to Reliance Natural Resources, and instead,  charge a higher rate of $4.20 per mmBtu.

The government's interlocutory application would serve to clarify that the NTPC dispute with RIL is different from the one between the Ambani brothers as its price is based on arms-length global bid whereas the RNRL claim over RIL's KG-D6 gas is based on a private family agreement.

The application would also seek to point out that RIL cannot take refuge under the government stand that it alone had the right to approve gas pricing to deny gas to NTPC since the $4.20 per mmBtu price would be applicable to all power plants of the state-firm except Kawas and Gandhar expansion projects, RIL had committed $2.34 per mmBtu.

According to the source NTPC will not file any petition in which it would become a party to the RIL versus RNRL court row in the Supreme Court but was free to appeal in the apex court on any aspect of its case against RIL in the Bombay High Court.