RIL opposes gas supply to NTPC

Reliance Industries (RIL) has opposed supplying its Krishna-Godavari basin gas to NTPC as its legal dispute with the nation's largest power generator, previously cited by the state-owned firm to block the sale of KG-D6 gas, is still pending at the Bombay High Court.

The Power Ministry has identified NTPC plants to take nearly half of the 18 million standard cubic metres per day of KG-D6 gas earmarked for the power sector.

This prompted RIL to question the logic of supplying gas to the state-owned firm that cited the court case not only to refuse participation in the process of discovering the price of KG-D6 gas but also blocked moves to sell the fuel to the Dabhol power plant.

"In the backdrop of continuing litigation it is completely inappropriate for the government to require Reliance to enter into commitments for sale of gas with NTPC," Reliance wrote to the Petroleum Ministry earlier this month.

Reliance had in 2007 offered gas from its KG-D6 fields to Ratnagiri Gas & Power (earlier Dabhol) but NTPC, which is half owner of the country's largest gas-fired unit, blocked the move even though this gas is cheaper than imported-LNG being used to fire the plant.

The government has now decided that KG-D6 gas, priced at a cap of $4.20 per million British thermal unit, will meet the entire fuel requirement of Dabhol.