Thanks, but No Thanks ; the Country's Largest Private Sector Company, Ril, Moves Heaven and Earth to Sell Kg Basin Gas to the Country's Largest Power Producer, but in Vain.

Summary

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All's fair in love and war. That seems to be the motto on both sides in the stand-off between public sector power giant NTPC Ltd and Mukesh Ambaniled Reliance Industries Ltd. (RIL) over the supply of natural gas from RIL's Krishna Godavari basin's D6 block.

Consider this: In 2008-09, NTPC sold power from its gas-based Kawas and Gandhar plants in Gujarat at Rs 6.34 and Rs 4.64 per unit, respectively. Compared to NTPC's average selling price of Rs 2.12 a unit last year, this was quite high. The two plants, with a combined capacity of 1,300 MW, had to buy gas from spot markets at steep rates. Since April, however, cheaper natural gas has started flowing from the KG basin and this can reduce NTPC's cost of power. But apparently that's not an important consideration for NTPC, which has decided not to touch RIL gas even if it means buying costlier gas for its Gujarat plants.

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Thanks, but No Thanks ; the Country's Largest Private Sector Company, Ril, Moves Heaven and Earth to Sell Kg Basin Gas to the Country's Largest Power Producer, but in Vain.

Indeed, Kawas and Gandhar are the reason why NTPC is averse to buying the KG basin gas. The public sector behemoth, which accounts for onefifth of the country's installed capacity with its 30,644 MW, is miffed with RIL for allegedly reneging on its commitment to supply KG basin gas at $2.34 per million metric British thermal units (MMBTU) for the 2,600-MW K...

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