Govt clears RIL gas for new power projects | business | Hindustan Times
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Govt clears RIL gas for new power projects

business Updated: Jan 09, 2009 20:51 IST
Anupama Airy

Pricing would continue to be an obstacle in the supply of gas from the Mukesh Ambani’s gas fields in the Krishna Godavari region to the Anil Ambani-controlled RNRL’s power project at Dadri.

Even as the EGOM (extended group of ministers) on gas pricing on Thursday decided that gas from RIL’s fields should be made available to RNRL’s 7,480 megawatt Dadri project as also to other greenfield power projects, company officials from both sides when contacted by Hindustan Times confirmed on the condition of anonymity that pricing of gas would play a major role in ending the stalemate between the two sides.

RIL expects power producers to shell out $4.21 per MMBTU (million british thermal unit) of gas, which is also in line with the price fixed by the EGOM. ADAG however does not agree to this price.

Sources close to the ADAG group said, “The price of $4.21 MMBTU is only for valuation purposes and is not necessarily the price for all gas sales.”

On record spokespersons of both companies said "We are not aware of any EGOM meeting or any such decision."

Interestingly, the government had all this while maintained that as long as the case between RIL and RNRL as also that of NTPC and RIL are sub-judice, it would not intervene. Asked to explain why the EGOM has now asked RIL to supply gas to Dadri, a senior government official said, “The EGOM has essentially directed that all green field and major gas based power stations, lying idle for lack of gas supplies, be given gas by RIL after it racks up its gas production from the existing 40 MMSCMD (million metric standard cubic meters per day) to 80 MMSCMD by June this year. This may also include power projects of Tata Power and other private producers.”

The official said a similar directive was given earlier by the government for supply of RIL gas to the Ratnagiri Power project (erstwhile Dabhol).