NTPC triples KG-D6 gas offtake from RIL

State-owned power utility NTPC has signed agreement to buy 1.2 million metric standard cubic meter a day (mmscmd) of more gas from Reliance Industries' (RIL) eastern offshore KG-D6 fields at the government-approved price of $4.2 per million British thermal unit (mBtu).

NTPC signed Gas Sale and Purchase Agreement (GSPA) to buy more gas on February 16, taking its total supplies from KG-D6 to 1.81 mmscmd, sources in the know said.

The government had in October 2009 allocated NTPC 3.85 mmscmd, beyond the 0.61 mmscmd it had earlier signed for.

But NTPC did not want to use the KG-D6 gas at its Kawas and Gandhar power plants in Gujarat, which are connected with pipelines ferrying KG-D6 gas from the Andhra coast. So, a swap arrangement was worked out wherein state-owned gas utility GAIL India was to divert gas from other sources to NTPC and supply Reliance gas to its existing customers.

However, limitations in GAIL's pipeline capacity restricted the swap to just 1.2 mmscmd, sources said, adding that additional gas supplies to NTPC would begin by next week.

NTPC's Anta plant in the national capital region currently gets 0.61 mmscmd of KG-D6 gas.

An RIL spokesperson could not be immediately reached for comments.

Sources said the state-run utility does not want to use KG-D6 gas at its Kawas and Gandhar plants as it is seeking RIL gas for expansion projects at the two sites at the price of $2.34 per mBtu that Mukesh Ambani-firm had committed in a 2004 tender.