OilMin pledges support for NTPC in legal fight with RIL

The Petroleum Ministry is believed to have told the Power Ministry that it would support NTPC Ltd in the state power firm's legal fight to get natural gas from Reliance Industries at prices the Mukesh Ambani-led firm had quoted in the 2004 tender.     

This was communicated to Power Secretary H S Brahma, when he met Petroleum Secretary R S Pandey here today.     

NTPC is seeking gas for its Kawas and Gandhar expansion projects in Gujarat at the $2.34 per million British thermal unit, rates which are 44 per cent lower than the Government approved price for RIL's KG-D6 fields.     

"There is no question of compromising on NTPC's interest. Never had we ever dumped the Navratna PSU and never had we tried to impose the $4.2 per mmBtu approved price on the two projects," a Petroleum Ministry official said.

 

The Ministry, he said, was only fighting to protect the Government's right to approve price of gas and fix usage of the fuel as per national priorities.

The oil ministry was of the view that RIL had violated the Production Sharing Contract for KG-D6 by not seeking approval of the government before committing a price to NTPC.     

Pandey, the sources said, informed Brahma that the Empowered Group of Ministers (EGoM), which had fixed the $4.2 per mmBtu price for KG-D6 gas, had stated that its decision was without prejudice to the outcome of NTPC versus RIL case.     

The EGoM had decided in 2008 that the verdict of the court case should be awaited.The ministry was of the view that the $4.20 per mmBtu price applies to all customers of KG-D6 gas and there cannot be different prices for different customers.     

Sources said the ministry was of the view that RNRL should not make NTPC's interest as an alibi to get cheaper gas because its claim flows from a private MoU which is at variance with government policies and PSC provisions. 

Power Minister Sushilkumar Shinde said his ministry did not want to get involved in the bigger dispute over the right of the government to approve the price at which RIL can sell gas to consumers and decide on the gas utilisation policy.     

"My corporation is capable of taking a decision (on the issue)... It is the board of directors (of NTPC) will take decision on this account," he told CNBC-TV18.     

NTPC had yesterday informed the Bombay Stock Exchange that it was consulting lawyers to approach the "relevant" forum on the issue of procuring gas from Mukesh Ambani-led RIL.