NTPC to buy gas from RIL, opposes marketing margin

NEW DELHI: State-run NTPC has agreed to buy natural gas from Reliance Industries but is opposed to paying marketing margin to the private firm and wants to use the fuel at plants other than Kawas and Gandhar that were identified by the government.

The government had allocated 2.67 million cubic metres of gas a day of natural gas from RIL's Bay of Bengal KG-D6 fields to NTPC but the state-run firm has refused to sign a purchase agreement, a senior official said.

The state-run firm was initially reluctant to take the allocation it had vehemently fought for, on grounds that it may compromise its court case against the Mukesh Ambani-firm for non-performance of a 2004 tender.

It has now agreed to buy the fuel but wants to renegotiate the terms, he said. "NTPC doesn't want to pay $0.12 per million British thermal unit marketing margin and wants changes in penalty clause to make RIL liable for defaults."

Also, NTPC wants to use gas at plants other than Kawas and Gandhar, which were originally identified by the government to use 1.76 mmcmd and 0.3 mmcmd gas respectively.

The official said NTPC's demand for changes in the Gas Sale and Purchase Agreement (GSPA) would not be possible as uniform agreements have been entered into with about two dozen buyers in fertiliser and power sector on terms negotiated by ministries of power, fertiliser and petroleum.