Date:07/05/2005 URL: http://www.thehindubusinessline.com/2005/05/07/stories/2005050701380200.htm

Back GAIL, NTPC reach pact over gas supply

Our Bureau

New Delhi , May 6

ENDING a period of uncertainty, NTPC and GAIL (India) Ltd have reached an agreement over the price of gas supplies from the Panna-Mukta and Tapti (PMT) fields.

GAIL started supply of gas from the Panna-Mukta Tapti field to NTPC on Friday at the rate of 2.1 million metric standard cubic meters per day (mmscmd), according to a GAIL release.

Efforts are on to supply additional 1.9 mmscmd of gas, thereby enhancing supplies by up to 4 mmscmd.

According to the company, GAIL has taken these steps keeping in view the onset of summer and to help ease the overall power situation.

NTPC has agreed to take the additional 1.9 mmscmd at a market related price of Rs 4,160 per SCM plus other charges.

Regarding the quantity of 2.1 mmscmd, NTPC has confirmed that it will abide by the final outcome of the ongoing discussions between the Ministry of Power and the Ministry of Petroleum and Natural Gas.

Six mmscmd of PMT gas was to be marketed by GAIL from April 1 to the power and fertiliser sectors at Rs 4,160 per SCM plus other charges.

While this price was accepted by consumers such as NFL, Chambal Fertilisers, Tata Fertilisers, Indo Gulf, IFFCO, Oswal Fertilisers, Pragati Power and Delhi Vidyut Board, NTPC was reluctant to accept the price, resulting in a lower offtake of PMT gas by GAIL.

But with NTPC now accepting the market related price for 1.9 mmscmd, the price issue of the remaining 2.1 mmscmd is also expected to be resolved soon.

Meanwhile, GAIL's offtake of PMT gas has now increased to about 5 mmscmd and is to reach 6 mmscmd shortly, the release said.