Our Bureau

New Delhi, March 29

NATIONAL Thermal Power Corporation (NTPC) will sign an agreement with Reliance Industries Ltd (RIL) by next week for supply of gas to its Kawas and Gandhar power plants in Gujarat.

"We will sign the agreement by next week. There are no problems in that," the NTPC Chairman and Managing Director, Mr C.P. Jain said, on the sidelines of a CII seminar here.

NTPC awarded the tender to RIL for supplying 13 million standard cubic metre gas a day for the two power plants in July last year, but the signing of the agreement had not taken place as yet.

The Kawas and Gandhar expansion projects have a capacity of 1,300 MW each, and commissioning of the projects is expected by end-2007.

Reliance had quoted a price of $2.97 per MMBTU (million British thermal units) for supply of gas. It would deliver natural gas from the Krishna-Godavari offshore basin in Andhra Pradesh to Gujarat through a 1,400-km pipeline.

Coal pricing: Speaking on the issue of coal pricing, the Coal Secretary, Mr P.C. Parakh, said coal was a commodity and has to be priced like one.

"There is no need for a coal regulator and it should be allowed to be priced by the market forces," Mr Parakh said. He said domestic coal production this year is estimated to be 360-370 million tonnes and imports would be 20-22 million tonnes. This leaves a demand- supply gap of 10-15 million tonnes, he said, adding that even this small quantity could be imported and there was no need for alarm over coal shortage.

The Power Secretary, Mr R.V. Shahi, said the country still has no energy market and prices should not be left to market forces alone. "Market determined price is an ideal situation but we are nowhere near an energy market. There has to be a roadmap for transition, but till then prices will have to be regulated," he said, adding that prices would shoot up if left to the market alone.

(This article was published in the Business Line print edition dated March 30, 2005)
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