State-owned power utility NTPC Ltd has tripled the volume of natural gas it buys from Reliance Industries at the government-approved price of $4.2 per mmBtu, to 1.81 million standard cubic meters a day.
NTPC, which till last month was taking 0.61 mmscmd from RIL's eastern offshore KG-D6 field, has begun drawing an additional 1.2 mmscmd of gas to boost power generation, sources in know said.
In October, the government had allocated an additional 3.85 mmscmd gas to NTPC. Since NTPC did not want to use the KG-D6 gas at its Kawas and Gandhar power plants in Gujarat that are connected with pipelines ferrying KG-D6 gas from the Andhra coast, a complex swap arrangement was worked out with state-owned gas utility GAIL India.
Under this arrangement, GAIL diverted gas from other sources to NTPC plants and supplied RIL 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 have begun to NTPC.
Sources said that NTPC 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 rates lower than the government approved price. It wants the Mukesh Ambani-firm to meet its commitment to supply gas at $2.34 per mmBtu as quoted by RIL in a 2004 tender.
NTPC, which was till now using KG-D6 gas at its Anta plant in the national capital region, had signed for additional volumes on February 16.
Sources said KG-D6 gas has replaced costly imported LNG at Anta plant to save Rs 150 crore in power generation cost annually.
The government had originally allocated NTPC 2.67 mmscmd of gas from KG-D6 fields but the company had on September 23 signed GSPA for less than one-fourth of the earmarked volumes.
NTPC had signed contracts with RIL to buy 0.13 mmscmd of natural gas from KG-D6 for its Faridabad power plant in Haryana, 0.03 mmscmd for Anta in Rajasthan and 0.45 mmscmd for its Dadri unit in Uttar Pradesh.
However, due to constraints in state-run gas utility GAIL India Ltd's pipeline to transport KG-D6 gas, all of the 0.61 mmscmd would be consumed at Anta plant for the time being, sources said.
Sources also said that of the 2.67-mmscmd originally allocated by the government to NTPC, its Kawas power plant in Gujarat was to get 1.75 mmscmd and Gandhar 0.30 mmscmd.
RIL is currently producing about 62 mmscmd of gas from KG-D6.