NTPC not signing gas agreement

8220;In our last meeting with NTPC on August 12,all issues relating to finalisation of GSPA were resolved and NTPC was to revert after obtaining internal approvals. However,we are still awaiting a formal response from NTPC in spite of regular follow-up,8221; RIL Executive Director P M S Prasad wrote to Power Secretary H S Brahma on August 31.

RIL had agreed to sign the GSPA with the caveat that the agreements would be 8220;without prejudice8221; to the outcome of the case in Bombay High Court over a 2004 tender where the Mukesh Ambani firm had quoted USD 2.34 per mmBtu as price for gas to be supplied to NTPC8217;s Kawas and Gandhar plants,he said.

Instead,NTPC has signed-up to buy 2.5 mmscmd of LNG for 10 years from overseas market and the delivered cost of this would be USD 11.2 per mmBtu as compared to KG-D6 burner tip cost of USD 6.5 per mmBtu,leading to a loss of Rs 600 crore per annum. Besides,NTPC buys 3-4 mmscmd LNG on spot basis,resulting in additional outgo of Rs 900 crore per annum.