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NTPC-RIL dispute on Gujarat power plants stuck in HC

BS Reporter  |  Mumbai 

For the past 29 months, the court case between NTPC and Reliance Industries (RIL) on two gas-based power plants in Gujarat has not come for hearing at the high court here.

NTPC took RIL to court in December 2005, after the latter would not sign a gas sale and purchase agreement (GSPA) because of a dispute over a clause relating to unlimited liability. It contends expansion of its Kawas and Gandhar olants have been delayed indefinitely, thanks to RIL.

NTPC planned to expand these two gas-based plants, whopse present capacity is 645 Mw by another 645 Mw each. This was planned in 2002, when the cost of setting up each Mw was Rs 3.25 crore and would have cost NTPC a total of Rs 2,128 crore. In the past decade, the cost of setting up each Mw has gone up to Rs 4.5 crore and the total bill to nearly Rs 2,950 crore.

An NTPC executive said the company requested the government for allocation of gas to the projects but this did not happen.

NTPC had invited a bid for supply of natural gas to these projects in October 2002 and RIL had emerged the sole successful bidder. It won the right to supply 12 million standard cubic metres a day (mscmd) of gas to NTPC's projects in Gujarat at $2.34 for a million British thermal units (mBtu). RIL had quoted the lowest price in 2004 in the bidding process and was subsequently issued a letter of intent (LoI). NTPC says it has a concluded contract but RIL that matters did not go beyond an LoI.

NTPC generates power from coal and gas. It has an installed capacity of 39,674 Mw of which around 3,955 Mw is gas-based. It has gas sales and transmission contracts (GSTCs) with GAIL for supply of administered price mechanism (APM) gas and Panna Mukta Tapti (PMT) gas to Anta, Auraiya, Dadri, Faridabad, Kawas & Gandhar for a combined quantity of 14.48 mscmd. The validity of the APM gas agreements are till July 2021, while the PMT gas agreements are valid till December 2019.

The Government of India allocated 4.46 mscmd of KG-D6 gas (from RIL’s Krishna-Godavari basin field) for NTPC’s stations at Anta, Auraiya, Dadri & Faridabad. The company in its 2011-12 annual report said GSPAs were signed with RIL and its joint venture partners, Niko and BP, for supply of 2.3 mscmd, valid till March 2014. The ministry of petroleum and natural gas has directed RIL and its JV partners to sign a GSPA for the balance quantity of 2.16 mscmd.

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First Published: Fri, December 21 2012. 00:36 IST