Power, oil ministries in tandem says power minister

New Delhi: A day after Petroleum Ministry threw its weight behind NTPC in its legal fight against Reliance Industries, Power Minister Sushilkumar Shinde on Thursday said his ministry had no differences on the issue with the oil ministry.

"I don't think there is any difference between petroleum ministry and power ministry on the RIL gas dispute," he told reporters in New Delhi.

NTPC has taken RIL to court seeking performance of a bid by the Mukesh Ambani firm to supply 12 million standard cubic meters per day of gas to its Kawas and Gandhar expansion projects at USD 2.34 per mmBtu.

However, the Oil Ministry has opposed the same price in case of supplies to be made to Anil Ambani Group firm RNRL on the basis of a private family agreement.

Petroleum Secretary R S Pandey had on Wednesday told his counterpart in the power ministry H S Brahma that NTPC's "interests will be protected by all means."

Asked if NTPC may file a petition in the Supreme Court to protect its interests, Shinde said: "It is left to NTPC to decide."

He said USD 2.34 per mmBtu rates were quoted by RIL in a NTPC tender of 2004 while the Government approved USD 4.2 per mmBtu price for the company's gas only in 2007. And so RIL has to honour its commitment.

Till the issue is resolved, NTPC will not take RIL's KG-D6 field gas at the two power plants and the fuel would be sourced from alternate markets like spot LNG market.

Sources had on Wednesday stated that the Petroleum Ministry would support NTPC in claiming damages from RIL for not keeping its commitment and the difference between the government approved price of USD 4.2 per mmBtu and the one committed in the tender would have to be made good by RIL.

While the ministry declared its support to NTPC in the court case against RIL, it has been opposing Anil Ambani Group firm RNRL's claim over the KG-D6 gas at a similar price on the grounds that a private family MoU could not impinge on the government's right to approve price and fix usage of gas.

The oil ministry was of the view that RIL had violated the Production Sharing Contract for KG-D6 by not seeking approval of the government before committing a price to NTPC.

Pandey, sources said, informed Brahma that the Empowered Group of Ministers (EGoM), which had fixed the USD 4.2 per mmBtu price for the KG-D6 gas, had stated that its decision was without prejudice to the outcome of NTPC versus RIL case.

The EGoM had decided in 2008 that the verdict of the court case should be awaited.

The ministry was of the view that the USD 4.20 per mmBtu price applies to all customers of KG-D6 gas and there cannot be different prices for different customers.