NTPC, RIL likely to sign gas pact for north Indian plants

National Thermal Power Corp Ltd, India's biggest power producer, will sign a pact on Saturday with Reliance Industries Ltd to buy natural gas from RIL's field in the Krishna-Godavari basin at the originally agreed price of $2.34 per mBtu, according to unconfirmed but widespread reports.

NTPC will buy 0.61 mmscm of gas a day for its plants in Anta, Auriya, Dadri and Faridabad, all in northern India. The state-owned power generator will have an option to draw more gas if needed, according to unidentified official sources. The gas will start flowing by December, they said.

The pact will exclude the Kawas and Gandhar plants, for which NTPC is in a dispute with Reliance. The power producer signed an agreement in 2005 to buy gas from the nation's biggest field to be discovered in decades. The deal turned sour after Reliance expressed inability to supply the fuel at the contracted rate because of a surge in the cost of developing the field, while at the same time the government decided that the price was too low.

The Supreme Court is hearing a lawsuit over the supply of gas from the KG-D6 field operated by Reliance to the two NTPC plants in Gujarat at a 44 per cent discount to a government- approved price. The power utility has said it's committed to draw 2.67 mmcm a day without prejudice to its rights and contentions in the legal dispute.