NTPC approaches High Court against RIL

NTPC wants its gas-supplies dispute case against RIL to be heard on a fast-track basis, and is likely to file a petition in the Bombay HC. A related case between RIL and RNRL is also being heard in the HC.

RIL, in 2004, had won the right to supply 12 mmscmd of gas to NTPC’s power projects in Gujarat at $2.34 per mmbtu. NTPC went to court in 2005 after RIL did not sign the agreement because of a dispute over a clause relating to unlimited liability. The RIL-RNRL gas sales agreement was drafted on similar lines. RNRL would benefit if the NTPC-RIL agreement fails as it will get the additional 12 mmscmd of gas allocated to NTPC at $2.34 per mmbtu.

When GAIL India is quoting $22 per mmbtu for imported LNG on a long-term basis, getting gas at $2.34 per mmbtu could help NTPC to reduce its power production costs drastically.