NTPC, RIL to sign gas pact by Sept-end

State-run NTPC is likely to sign by month-end an agreement to buy natural gas allocated by the Centre from Mukesh Ambani-run Reliance Industries (RIL) at government-approved rate of $4.20 per million British thermal unit (mmBtu), Power Secretary H S Brahma said today.

NTPC, which has been allocated 2.67 million standard cubic meters of gas (mmscmd) per day from RIL's eastern offshore KG-D6 fields, will use the fuel at its Anta, Dadri and Faridabad near the national capital.

"In all likelihood, NTPC will sign the Gas Sales and Purchase Agreement (GSPA) with RIL by this month end," Brahma told reporters here.

Of the 40 mmscmd of initial output from KG-D6 fields allocated to over 35 companies in fertilizer, power, LPG, steel and city gas, only NTPC is yet to sign the GSPA.

Brahma said NTPC will use the KG-D6 gas at plants other than Kawas and Gandhar, which were initially identified for usage of the fuel.

NTPC does not want to use KG-D6 gas in Kawas and Gandhar as it is locked in a legal battle with RIL over 'failure' of Mukesh Ambani-firm to honour its 2004 bid to supply 12 mmscmd of gas to expansion projects at these sites in Gujarat at $2.34 per mmBtu. RIL says the contract was not concluded.

RIL Executive Director P M S Prasad had on August 31 written to Brahma saying NTPC had not reverted on signing of GSPA despite all issues being finalised at last meeting on August 12.