A day after the petroleum ministry threw its weight behind NTPC in its legal fight against Reliance Industries Ltd (RIL), Power Minister Sushilkumar Shinde today said his ministry had no differences on the issue with the oil ministry. “I don’t think there is any difference between the petroleum ministry and power ministry on the RIL gas dispute,” he told reporters here.
NTPC has taken RIL to court seeking performance of a bid by the Mukesh Ambani firm to supply 12 million standard cubic metres a day of gas to its Kawas and Gandhar expansion projects at $2.34 per mBtu.
However, the oil ministry has opposed the same price in case of supplies to be made to Anil Ambani Group firm RNRL on the basis of a private family agreement.
Petroleum Secretary R S Pandey had yesterday told his counterpart in the power ministry H S Brahma that NTPC’s “interests will be protected by all means”.
Asked if NTPC may file a petition in the Supreme Court to protect its interests, Shinde said: “It is left to NTPC to decide.”
He said $2.34 per mBtu rates were quoted by RIL in a NTPC tender of 2004, while the government approved $4.2 per mBtu price for the company’s gas only in 2007. And so RIL has to honour its commitment.
Till the issue is resolved, NTPC will not take RIL’s KG-D6 field gas at the two power plants and the fuel would be sourced from alternative markets like spot LNG market.
Sources had yesterday stated that the petroleum ministry would support NTPC in claiming damages from RIL for not keeping its commitment and the difference between the government approved price of $4.2 per mBtu and the one committed in the tender would have to be made good by RIL.
While the ministry declared its support to NTPC in the court case against RIL, it has been opposing Anil Ambani Group firm RNRL’s claim over the KG-D6 gas at a similar price on the grounds that a private family MoU could not impinge on the government’s right to approve price and fix usage of gas.
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, sources said, informed Brahma that the Empowered Group of Ministers (EGoM), which had fixed the $4.2 per mBtu price for the 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 mBtu price applies to all customers of KG-D6 gas and there cannot be different prices for different customers.
