Mukesh Ambani-owned Reliance Industries Limited (RIL) on Wednesday cautioned NTPC against making any comments on sub-judice matters lest they are construed as attempt to influence the outcome of its court case seeking natural gas at the price committed in 2004.
Commenting on NTPC’s filing to the stock exchanges last week, RIL President (Gas) R. P. Sharma has written to the Union Power Secretary H. S. Brahma saying: “NTPC’s statement purports to state that a contract came into existence between NTPC and RIL even before the court has heard the arguments and pronounced judgment”.
RIL rubbished NTPC claims of savings to consumers on difference between the 2004 bid price and the Government approved rates of $4.2 per mBtu saying the $2.34 per mBtu gas price was for expansion projects at Kawas and Gandhar which do not exist today and the other rate was for existing plants.
Against the delivered price of $6.5 per mBtu of KG-D6 gas, NTPC has contracted RLNG (regassified-LNG) on a long-term take-or-pay basis for ten years from January 2010 for its existing plants at an average delivered price of $11.2 per mBtu on net calorific value basis.
“At an average difference of $4 per mBtu between the delivered price of RLNG and KG-D6 gas, purchase of 9 million standard cubic metres a day will result in an increase in cost by over Rs. 1,900 crore annually”.
Mr. Sharma cited the NTPC’s average cost of power generation at Kawas and Gandhar for 2008-10 at Rs. 6.34 per unit and Rs. 6.64 per unit, respectively to say that the average fuel cost at these plants should be $16 and $11 per mBtu.
“With these figures, it is obvious that if NTPC buys KG-D6 gas from RIL at the approved price of $4.2 per mBtu, the cost of generating power would be just about Rs. 3 per unit, implying a reduction of Rs. 3.3 per unit and Rs. 3.6 per unit for Kawas and Gandhar, respectively,” he added.