New Delhi: State-owned power utility NTPC Ltd has signed agreement to buy 1.2 million cubic meters a day of more gas from Reliance Industries’ eastern offshore KG-D6 fields at the government-approved price of $4.2 per mmBtu.
NTPC signed Gas Sale and Purchase Agreement (GSPA) to buy more gas on February 16, taking its total supplies from KG-D6 to 1.81 mmscmd, sources in the know said.
The government had in October 2009 allocated NTPC 3.85 mmscmd, beyond the 0.61 mmscmd it had earlier signed for.
But NTPC did not want to use the KG-D6 gas at its Kawas and Gandhar power plants in Gujarat, which are connected with pipelines ferrying KG-D6 gas from the Andhra coast. So, a swap arrangement was worked out wherein state-owned gas utility GAIL India was to divert gas from other sources to NTPC and supply Reliance gas to its existing customers.
However, limitations in GAIL’s pipeline capacity restricted the swap to just 1.2 mmscmd, sources said, adding that additional gas supplies to NTPC would begin by next week.
NTPC’s Anta plant in the national capital region currently gets 0.61 mmscmd of KG-D6 gas.
A Reliance spokesperson could not be immediately reached for comments.
Sources said the state-run utility does not want to use KG-D6 gas at its Kawas and Gandhar plants as it is seeking RIL gas for expansion projects at the two sites at the price of USD 2.34 per mmBtu that Mukesh Ambani-firm had committed in a 2004 tender.
Sources said KG-D6 gas has replaced costly imported LNG at NTPC’s Anta plant to save Rs 150 crore in power generation cost annually.
The government had originally allocated NTPC 2.67 mmscmd of gas from KG-D6 fields but the company had on September 23 signed GSPA for less than one-fourth of the earmarked volumes.
NTPC had signed contracts with RIL to buy 0.13 mmscmd of KG D-6 for its Faridabad power plant in Haryana, 0.03 mmscmd for Anta in Rajasthan and 0.45 mmscmd for its Dadri unit in Uttar Pradesh.
However, due to constraints in state-run gas utility GAIL India Ltd’s pipeline to transport KG-D6 gas, all of the 0.61 mmscmd would be consumed at Anta plant for the time being, sources said.
Sources also said of the 2.67 mmscmd originally allocated by the government to NTPC, its Kawas power plant in Gujarat was to get 1.75 mmscmd and Gandhar 0.30 mmscmd.
RIL is currently producing about 60-62 mmscmd of gas from KG-D6.