Don't wait for court decision on RIL dispute: NTPC

With Reliance Industries Ltd (RIL) stating in court that gas from its D6 block will be available for only 11 years, NTPC wants the empowered group of ministers (EGoM) to give directions to RIL for supply of gas to its Kawas and Gandhar expansion projects. The company wants the directions to be given under clause 21.6.2 (b) of the production sharing contract for supply of 12 million standard cubic metres a day for 17 years.

The power major wants the gas to be supplied on the terms at which it had signed a contract with RIL, without prejudice to the ongoing case between the two in the Bombay High Court. This means the quantity should be made available at $2.34 per unit instead of the EGoM-mandated price of $4.2.

In a letter to Union power secretary H S Brahma, NTPC’s chairman and managing director R S Sharma said, “By the time, NTPC’s suit with appeals, etc is finally decided, there may not be gas available to meet RIL’s supply obligations under the gas sale and purchase agreement.”

He said as NTPC’s disputed contract with RIL is for 17 years, the RIL declaration that the gas is available for only 11 years has serious implications and is against NTPC’s interest.

NTPC had, in 2005, taken RIL to court for allegedly not honouring its gas supply tender. RIL is also fighting another case with rival RNRL for supply of gas under the terms and conditions offered to NTPC.