A senior NTPC representative met officials of the State Energy Department in Gandhinagar a couple of days ago to discuss the gas price issue with them. During the meeting, the representative impressed upon state officials that Gujarat could be benefitted immensely if RIL supplies gas to NTPC-run Gandhar and Kawas power plants at cheaper rates.

At present, NTPC’s gas-based power plants generate 1,300 MW of power per day, out of which Gujarat receives 50 per cent. The corporation has now proposed to expand its installed capacity to 2,600 MW at these two plants.

According to sources, NTPC has demanded that RIL should honour an agreement inked between the two parties in 2005 that it (RIL) will supply gas from the KG basin at 2.34 dollar per million metric British thermal unit (mmBtu) for the corporation’s Gandhar and Kawas plants under its expansion plans.

Sources also said that NTPC has stopped using RIL gas from the KG basin and has instead decided to purchase Re-Liquified Natural Gas (RLNG) at much higher cost.

The RLNG prices work out at 6.9 dollar per mmBtu, as against the RIL gas price fixed by the Centre at 4.2 dollar per mmBtu. NTPC, however, insists that RIL should supply gas at 2.34 dollar per mmBtu as per the agreement.

RIL had recently written to the Narendra Modi government, sounding a warning that the reluctance by the NTPC to use gas from the KG basin for its Gandhar and Kawas plants