Reliance battlers write to OilMin on gas supply to NTPC

RNRL seeks government intervention

Government-owned NTPC Ltd became the subject of letters written by the warring Reliance groups today.

Mukesh Ambani’s Reliance Industries Ltd (RIL) and Anil Ambani's Reliance Natural Resources Ltd (RNRL), in separate letters to the petroleum ministry, took up the issue of sale of natural gas to the power major.

RNRL asked the government to intervene in the RIL-NTPC case that is pending in the high court here. RIL clarified its stand on the price it quoted to NTPC being subject to approval by the government.

NTPC and RIL are embroiled in a legal dispute on gas supply from the Krishna-Godavari D-6 Basin, owned by the latter, for the former’s power plants at Kawas and Gandhar at $2.34 per mBtu.

P M S Prasad, RIL’s petroleum business head, in a letter addressed to Union petroleum secretary R S Pandey said, “During the entire period of 16 months of negotiation of gas sale and purchase agreement (GSPA) with NTPC, the issue of government approval of gas price under the production sharing contract (PSC) was never objected to by NTPC.” He said NTPC was not only aware of the requirement of gas price approval under the PSC, but had in fact insisted upon and agreed to its inclusion as a condition precedent to the gas supply agreement. “Therefore, NTPC’s letter to the government at this stage is clearly an after-thought, intended to mislead the government,” Prasad stated in the letter.

NTPC Chairman R S Sharma had earlier written to the government that, “RIL did not convey to NTPC that the price of gas quoted by RIL in the international competitive bidding was subject to approval of the government under the PSC.”

In a letter to Pandey, RNRL group president A N Sethuraman said, “We would request in the interest of having a uniform approach to kindly consider becoming a party in the RIL-NTPC litigation, as it involves a government-owned PSU and concerns an exorbitant burden of an additional Rs 30,000 crore that power consumers in the country may be called upon to bear, solely for the benefit of a private monopoly gas producer, RIL.”

RNRL is involved in a dispute with RIL over supply of gas from the D-6 fields at a price of $2.34 a unit for its power plant at Dadri, Uttar Pradesh. In the letter, the company has stated that RIL’s gas pricing remains 20 per cent up, when global gas prices have fallen by nearly 80 per cent. The company has also alleged that RIL is keeping the gas supply artificially low, to extract a higher price of gas and make supernormal profits. “Most independent experts believe there is little or no demand for gas in the country at the high price of $4.2 per mBtu, which is presently being insisted upon.”