Power ministry asks NTPC to sign gas deal with RIL

The Power Ministry is believed to have instructed state-run NTPC to sign a gas supply deal with Mukesh Ambani-led RIL to lift government allotted quota, while favouring that marketing margins be decided by the Oil Ministry instead of the supplier.

"The GSPA (gas sales and purchase agreement) for supply of gas from RIL to NTPC for its Kawas and Gandhar expansion projects could be signed by the month-end," a Power Ministry source said.

Regarding the marketing margins, the sources said that the state-run power major has been told that these could be decided by the Petroleum Ministry, rather than the supplier -- Reliance Industries.

Anil Ambani group, in the midst of a legal battle over gas supply with RIL, recently raised a row saying that the marketing margin charged by the Mukesh Ambani-led firm was illegal.

In a recent communication made to the Power Secretary, Reliance Industries had said that NTPC was refusing to sign GSPA to take the government allocated 2.67 mmscmd of KG-D6 gas for its existing plans.

This gas was allocated to NTPC by the government and is not the subject matter of a legal case that the power PSU has initiated against RIL over supply of 12 mmscmd over 17 years.

NTPC Chairman and Managing Director R S Sharma had recently said that his company would not let that contract go "at any cost."

"While RIL has been able to sign GSPA with about 40 customers in the power, fertilizer, steel, city gas and LPG sectors to whom government made contractual allocations, the GSPA between RIL and NTPC remains to be executed despite discussion for over four months," RIL President (Gas) R P Sharma wrote to Brahma.