State-owned power utility NTPC Ltd has tripled the volume of natural gas it buys from Reliance Industries at the government-approved price of USD 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 USD 2.34 per mmBtu as quoted by RIL in a 2004 tender.