RIL says it signed gas contract, only NTPC did not

Reliance Industries has said that it had in December 2005 signed a contract to sell natural gas to NTPC at $ 2.34 per mmBtu price for 17 years, but it was the state-run firm that did not reciprocate.

Mukesh Ambani-led RIL said it had on December 14, 2005 sent a signed Gas Sales Purchase Agreement to NTPC committing to sell gas from its KG-D6 fields at a delivered price of $3.18 per million British thermal unit at its Kawas and Gandhar plants in Gujarat and asked the state-run firm to return two signed copies of it.

"NTPC, however, did not sign the GSPA, instead chose to file a suit against RIL in the Bombay High Court for the reasons best known to them," RIL executive director PMS Prasad wrote to power secretary HS Brahma on August 31. "With the matter in court, RIL had no option but to withdraw the offer contained in the signed GSPA sent to NTPC."

NTPC has taken RIL to court seeking performance of the 2004 bid of $2.34 per mmBtu (landfall point price), as the Mukesh Ambani-led company insisted that the price needs nod of government, which in 2007 approved $4.2 per mmBtu as price of gas.

"I regret to say that if international competitive bidding processes are intended to be treated with such disdain from responsible bidder (RIL), the world of business founded on trust and faith will break down... The fact that (NTPC) had to file a suit is a telling comment on the facts of the present case," Solicitor General G Subramanium had said, opining that NTPC should move the Supreme Court.