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Home News Power Sector News KG Gas - Oil ministry for Ambani and Power ministry for NTPC

KG Gas - Oil ministry for Ambani and Power ministry for NTPC

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KGD-6Showing that the dispute between the power and petroleum ministries is very much alive, power secretary H S Brahma has written to his counterpart in the petroleum ministry, S Sundareshan, seeking gas from Reliance Industries Ltd's Krishna-Godavari gas for the National Thermal Power Corp at the originally agreed price of $2.34 per unit (mmscmd). The petroleum ministry has mandated a price that is about 45 per cent higher.

Brahma refers to discussions at the residence of the solicitor-general during a briefing on the suit between NTPC and RIL to buttress his demand. In the letter, dated 3 March, he insists that the oil and gas ministry allocate 12 mmscmd of gas to NTPC immediately, without waiting for further resolution of the RIL-NTPC proceedings in the Bombay High Court, as this was agreed at the meeting with the solicitor-general.

The letter followed a similar statement from Brahma on 28 January, which said, ''It was deliberated and agreed that ministry of petroleum and natural gas will put up the proposal for allocation of 12 mmscmd of gas to NTPC at the ICB (international competitive bidding) discovered price.''

Mukesh Ambani's RIL is locked with brother Anil's Reliance Natural Resources Ltd and the power ministry in a three-way court battle over the pricing of gas from RIL's Andhra Pradesh offshore fields.

The March 3 letter followed a similar statement from Brahma on January 28, 2010, according to the letter which read, “It was deliberated and agreed that Ministry of Petroleum & Natural Gas will put up the proposal for allocation of 12 mmscmd of gas to NTPC at the ICB discovered price.”

Citing the December 1, 2009 affidavit, the power secretary requested that Sundareshan move an Empowered Group of Minister’s note for allocation. “It is submitted that a decision in respect of NTPC will be taken as and when... the rights of NTPC get established in the pending suit; or... factors of overriding public interest warrant any governmental intervention,” reads the affidavit.

Reliance Power officials released the letter and affidavit to media outlets on Tuesday behind the premise that the company should illustrate the government’s position which supports the $2.34 cost for gas over the next decade. “What we’re trying to bring out is the role the government is playing; the government is helping a private company at the cost of a (public sector undertaking),” said a Reliance Power source under a condition of anonymity.

Bizarrely, two arms of the government are virtually at legal loggerheads over the pricing of the gas.

Source- Domain-B

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