NTPC must move court to get gas at $2.34, says AG.

Our Bureau

New Delhi, Aug. 13 The Prime Minister, Dr Manmohan Singh, has formed a four-member core committee of Ministers to monitor the Government’s stand on the Krishna Godavari Basin D6 block gas dispute between Reliance Industries Ltd (RIL) and Reliance Natural Resources Ltd (RNRL) in the Supreme Court.

Official sources said the committee would be headed by the Finance Minister, Mr Pranab Mukherjee, and have the Petroleum Minister, Mr Murli Deora; the Law Minister, Mr Veerappa Moily; and the Power Minister, Mr Sushil Kumar Shinde, as members.

A decision to this effect was taken following the Petroleum Minister’s meeting with the Prime Minister on Wednesday.

Mr Deora had apprised the Prime Minister on the impact of the Bombay High Court order of June 15 that upheld the validity of the family memorandum of understanding between Mr Mukesh Ambani and Mr Anil Ambani.

In another development the Attorney-General, Mr Goolam Vahanvati, voiced a opinion similar to the one earlier expressed by the Solicitor-General, Mr Gopal Subramaniam.

He said that it was important in the public interest for NTPC to move the Supreme Court and obtain gas at a lower price ($2.34 per million British units).

Following international competitive bidding, RIL had entered into a contract with NTPC to supply gas to the power major’s Jhanor and Kawas projects for 17 years at $2.34/mBtu. The Centre had later fixed the gas price at a much higher $4.2 per mBtu, which according to NTPC, would frustrate its deal with RIL.

While RIL claimed that the contract was not yet concluded and did not sign it, NTPC maintained that the letter of intent issued to RIL was an agreement. The matter is currently before the Bombay High Court.

Related Stories:
Deora briefs PM on gas row
RIL seeks to be heard in gas dispute case
NTPC to ink gas deal with Reliance soon
NTPC to get gas from Reliance at $4.2

(This article was published in the Business Line print edition dated August 14, 2009)
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