NTPC willing to pay Empowered Group of Ministers prescribed rate for gas for expansion projects

State-run National Thermal Power Corporation Ltd (NTPC) today said it is ready to buy gas for its expansion projects at Kawas and Gandhar at a price decided by an Empowered Group of Ministers (EGoM), as the projects would suffer without the fuel.

"We have approached the government to allocate gas, and at whatever price the EGoM decides," NTPC chairman and managing director Arup Roy Choudhury told reporters in New Delhi.

NTPC has taken supplier RIL to court seeking supply of 12 mmscmd of gas for the expansion projects in Gujarat at US$2.97 per million British thermal unit, a price that the Mukesh Ambani firm had bid in the 2004 tender.

Reliance Industries Ltd (RIL) says it cannot sell gas at that rate because of differences with NTPC over terms of supply. Meanwhile in 2007, the EGoM fixed US$4.20 per mmBtu as the price for gas from RIL's KG-D6 fields till March 31, 2014.

The matter is before the Bombay high court.

Choudhury said, "We would offtake that gas (at a price decided by EGoM). We may use it for our Kawas and Gandhar expansion projects along with other gas-based project because without gas allocation we cannot go ahead with our project."

About the long standing dispute with RIL over KG-D6 basin gas price, he said, "We have a dispute with RIL. We are on a very strong wicket."

"The solicitor general of India has said that its (EGoM's decision on gas price) is not going to weaken our case with RIL."

NTPC has close to 3,600 MW gas based generation capacity. It required 15.5 million standard cubic meter per of gas per day (mmscmd).

The company has tied up for 13 mmscmd whereas it buys 1-2 mmscmd from the spot market. It has planned to add about 4,000 MW of gas based generation capacity, provided gas supply is tied up.

NTPC has asked the government to ensure supply of 22.5 mmscmd of gas for its projects.