| Govt reverses stand on KG gas pricing for NTPC | STATE- RUN NTPC would not be allowed to buy KG- D6 gas at less than $ 4.20 per million British thermal unit ( mmBtu), the union government told the Bombay High Court on Monday. The high court is hearing a dispute between Mukesh Ambani- led Reliance Industries ( RIL) and Anil Ambani's Reliance Natural Resources ( RNRL) over a gas sale agreement, in which the government has intervened. Additional solicitor general Mohan Parasaran told the court that NTPC will not be allowed to buy gas at less than $ 4.2 per mmBtu as the power ministry will have to go by the decision of the empowered group of ministers on the issue. The power ministry has been backing NTPC as the power utility comes under the administrative control. He also said that the gas should be sold as per the marketing priorities as spelt out in the gas utilisation policy of the government. NTPC has filed a separate suit against RIL, seeking that RIL execute the contract of gas supply. RIL, on the other hand claims that the contract with NTPC was not formalised. According to the NTPC- RIL contract, NTPC is due to get the gas from KG basin at $ 2.34 mmBtu. RNRL has also staked a claim to get the gas get the gas from RIL at the same price as NTPC as part of the family settlement of the two brothers reached over the division of the business empire earlier run by their father Dhirubhai Ambani. The hearing in RIL- RNRL case will continue. The government had suddenly decided to withdraw from the case between the two brothers last month in order to expedite the proceedings so that a settlement could reach earlier and the gas flows out of the field to the power plants and fertiliser units. | HC asks govt to clarify stand on RIL gas pricing Our Bureau MUMBAI ET January13, 2009 Delhi P-4
THE Bombay High Court on Monday asked the government to clarify the price at which gas from Reliance Industries' Krishna-Godavari basin off the east coast would be sold to state-owned power generating company NTPC. The government will file its reply on Tuesday.
A division bench of the court comprising Justice J N Patel and Justice K K Tated asked for a clarification from government counsel Mohan Parasaran on this aspect while hearing the legal dispute between Mukesh Ambani-led RIL and Anil Ambani group firm Reliance Natural Resources (RNRL). The agreement between RIL and RNRL was based on a similar contract between RIL and NTPC. The government is an intervener in the RIL-RNRL case.
"NTPC has yet to come for government approval (for the NTPC-RIL gas deal). We will ensure a level playing field," Mr Parasaran said.
RIL had agreed to supply 12 million metric standard cubic meters per day (mmscmd) of gas to NTPC at $2.34 per mmbtu for 17 years. The price is, however, subject to government approval.
Mr Parasaran said the sale price of $4.2 per unit of natural gas from the KG basin, which was determined by an Empowered Group of Ministers (EGoM), would be applicable to all buyers, including government companies and private firms.
Reacting to Monday's court proceedings, RIL counsel Harish Salve told ET: "It's good for us, if the court lifts stay and directs RIL to sell gas to a government company. We can sell entire KG basin gas to Gail, for example, at $4.2 per mmbtu. RIL's $10 billion is stuck in the KG basin project. We need to recover the money."
If the EGoM decision on gas pricing turns out to be applicable to NTPC, the country's largest power producer may have to fork out $4.2 per mmbtu, almost double of what it had agreed with RIL.. This would translate a total loss of Rs 24,000 crore over 17 years. A press release from the EGoM issued on the day the price of $4.20 was decided said the number was "without prejudice" to the RILRNRL and RIL-NTPC court cases".
NTPC is fighting a separate legal battle with Reliance Industries in the Bombay High Court. NTPC's allegation is that RIL did not honour the gas agreement it had signed.
HC asks govt to clarify stand on RIL gas pricing Our Bureau MUMBAI ET January13, 2009 Delhi P-4
THE Bombay High Court on Monday asked the government to clarify the price at which gas from Reliance Industries' Krishna-Godavari basin off the east coast would be sold to state-owned power generating company NTPC. The government will file its reply on Tuesday.
A division bench of the court comprising Justice J N Patel and Justice K K Tated asked for a clarification from government counsel Mohan Parasaran on this aspect while hearing the legal dispute between Mukesh Ambani-led RIL and Anil Ambani group firm Reliance Natural Resources (RNRL). The agreement between RIL and RNRL was based on a similar contract between RIL and NTPC. The government is an intervener in the RIL-RNRL case.
"NTPC has yet to come for government approval (for the NTPC-RIL gas deal). We will ensure a level playing field," Mr Parasaran said.
RIL had agreed to supply 12 million metric standard cubic meters per day (mmscmd) of gas to NTPC at $2.34 per mmbtu for 17 years. The price is, however, subject to government approval.
Mr Parasaran said the sale price of $4.2 per unit of natural gas from the KG basin, which was determined by an Empowered Group of Ministers (EGoM), would be applicable to all buyers, including government companies and private firms.
Reacting to Monday's court proceedings, RIL counsel Harish Salve told ET: "It's good for us, if the court lifts stay and directs RIL to sell gas to a government company. We can sell entire KG basin gas to Gail, for example, at $4.2 per mmbtu. RIL's $10 billion is stuck in the KG basin project. We need to recover the money."
If the EGoM decision on gas pricing turns out to be applicable to NTPC, the country's largest power producer may have to fork out $4.2 per mmbtu, almost double of what it had agreed with RIL.. This would translate a total loss of Rs 24,000 crore over 17 years. A press release from the EGoM issued on the day the price of $4.20 was decided said the number was "without prejudice" to the RILRNRL and RIL-NTPC court cases".
NTPC is fighting a separate legal battle with Reliance Industries in the Bombay High Court. NTPC's allegation is that RIL did not honour the gas agreement it had signed.
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