Reliance Industries Ltd has asked the government to re-allocate the gas supplied by it which state-run NTPC has refused to take, pending the outcome of a legal battle with RIL in the Bombay High Court, to other customers.
RIL President and CEO (Petroleum) P M S Prasad, in a letter addressed to Union petroleum secretary R S Pandey on October 7 has said, “In view of the persistent stand of NTPC not to sign (a) Gas Sales and Purchase Agreement (GSPA) for its Kawas and Gandhar plants, it is requested that the 2.1 mmscmd (million cubic metres a day) of gas allocated to the Kawas and Gandhar plants be reallocated to other customers.”
Gas pricing and customers are decided by the Union petroleum ministry for even private producers. RIL and NTPC are engaged in a legal tangle in the Bombay HC over sale of gas from the Krishna-Godavari basin on the eastern coast to the Kawas and Gandhar expansion projects at $2.34 per mmBtu.
NTPC was allocated 2.67 mmscmd from the KG-D6 fields, but has refused to sign contracts for that portion (2.1 mmscmd) allocated to the Kawas and Gandhar units in Gujarat.
“Despite RIL having agreed to sign the GSPAs with the caveat that these GSPAs would be ‘without prejudice’ to the ongoing matter that is sub judice, NTPC continues to maintain that it does not want to discuss the GSPA for the existing Kawas and Gandhar plants even though the ongoing litigation relates to the proposed expansion of Kawas and Gandhar,” Prasad wrote.
A GSPA with NTPC for supply of 0.61 mmscmd gas to their Anta, Dadri and Faridabad plants were signed on September 23 but the state-run firm is yet to start drawing even these volumes.
NTPC has said that taking any of the supply meant for Kawas and Gandhar could affect its case in the court.
RIL is forced to keep output at just over 40 mmscmd of gas from KG-D6 fields despite having a capacity to produce nearly 65 mmscmd, as customers are not taking their allocated quantity and the government has failed to name new buyers beyond the initial volumes.
“Keeping in view the huge demand for gas in the country and also the fact that several customers are awaiting allocation of gas, it is only fair that the gas declined to be taken by NTPC for their Kawas and Gandhar plants be relocated to other customers,” the letter stated.
