NTPC fires salvo at RIL over KG gas | business | Hindustan Times
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NTPC fires salvo at RIL over KG gas

business Updated: Feb 26, 2009 20:47 IST
Anupama Airy

Yet another war is raging between Reliance Industries Ltd (RIL) and NTPC Ltd. But this time, the war is being fought outside the courtrooms.

NTPC has taken a strong objection to the claims staked by RIL that pending the outcome of the ongoing legal battle between the two companies, gas from the D6 gas fields of RIL in the Krishna Godavari basin cannot be supplied to NTPC’s power projects.

The battle is over a contract awarded by NTPC to RIL for supply of gas to its gas-based power stations at Kawas and Gandhar in Gujarat.

RIL holds a 90 per cent stake in the KG D6 fields, while its partner Niko holds the remaining 10 per cent. Production of gas is expected to begin shortly from the D6 fields.

Hindustan Times had first reported on February 18 that despite the directives of the empowered group of ministers (EGOM) on allocation of KG D6 gas to priority sectors such as power and fertilisers, RIL is refusing to sell any gas to NTPC. RIL had told the government that NTPC was a “litigious customer” and “it cannot be forced to sell gas to NTPC.”

In a strong rebuttal to such claims by RIL, NTPC has told the government that it was well within its rights “to claim RIL’s KGD6 gas for its existing power plants”.

In a letter to the ministries of power and petroleum, the chairman and managing director of NTPC, R S Sharma said, “As per the decisions taken by the EGoM on the gas utilisation policy, 18 million standard cubic metres of gas per day has been allocated for the power sector on a priority basis.”

“The buyers amongst other power developers also included NTPC’s power projects and thus NTPC has a right to claim gas for its existing power plants.”

“KG D6 gas should be supplied to its existing gas based power stations in accordance with the priority allocation finalised by the government without prejudice to NTPC’s rights and contentions of

the ongoing suit against RIL in the Bombay High Court,”NTPC said.