NEW DELHI: An Empowered Group of Ministers (EGoM) has deferred a decision on the price at which Reliance Industries had offered to sell gas to power utility company NTPC in 2004 as the matter was sub-judice.
The EGoM, headed by External Affairs Minister Pranab Mukherjee, met last evening after Samajwadi Party leader Amar Singh sought the panel's approval for the USD 2.34 per million British thermal unit price Mukesh Ambani firm had offered in NTPC gas supply tender.
It, however, decided to await the verdict of Bombay High Court, which is hearing the dispute between RIL and NPTC over the supply of gas, official sources said.
NTPC has taken RIL to court seeking 12 million cubic meters per day after the two firms could not reach a gas sales agreement over issues such as liability in case of default.
RIL had not sought Government approval for the price saying it had not concluded gas supply contract with NTPC. It maintains that clauses such as the amount of liability would have a direct bearing on the gas price and till they are settled, it could not seek the Government nod.
Sources said the EGoM decided that USD 4.2 per mmBtu price fixed for gas from RIL's eastern offshore KG-D6 fields will hold valid for all gas sales but without any prejudice to the court cases.
The panel also decided not to take a view on the USD 2.34 per mmBtu price younger brother Anil Ambani's Group is seeking for 28 mmscmd gas it claims from KG-D6 as per family split, because the two Ambanis are in court over the supply of fuel.
EGoM's approval of NTPC price would have strengthened Anil Ambani Group's claim, helping it save Rs 3,000 crore annually for 17 years (Rs 51,000 crore) over the Government approved price of USD 4.2 per mmBtu for KG-D6 gas.
Sources said the EGoM decided to honour the verdict of the courts in the gas disputes.
The EGoM meeting that was attended by Finance Minister P Chidambaram, Law Minister H R Bharadwaj, Petroleum Minister Murli Deora, Power Minister Sushilkumar Shinde, Steel Minister Ram Vilas Paswan and Corporate Affairs Minister Prem Chand Gupta had to be convened as it received repeated requests for approval of NTPC gas price.
Sources said the EGoM felt that its September 2007 decision that fixed USD 4.2 per mmBtu price for KG-D6 gas was a fair price as it was arrived at in a transparent manner and should hold good for all gas sale contracts.
The Group also decided to allocate gas to steel industries from the KG-D6 field once RIL increases production beyond 40 mmscmd.
RIL is to begin production of gas from its eastern offshore D6 field in January 2009 and would ramp it up to 40 mmscmd by the year-end.
Peak production from the field is envisaged at 80 mmscmd.
