Reliance and NTPC miss deadline for KG gas contract

Vol 8, PW 11 (25 Aug 04) News in Brief

Reliance and NTPC have missed their self-imposed 15th August deadline to sign a 17-year supply contract for 3m t/y of Krishna Godavari gas to the Kawas and Gandhar power plants.

Various schedules attached to the contract are still to be finalised, says a source. The delay is from both sides and by mutual understanding.

The contract will be signed within a few days. Despite this minor delay, we understand that the one-year period for fulfilling the conditions precedent to setting the actual gas supply date began on 16th August.

Reliance must begin gas supplies within 28 to 40 months of the conditions precedent being complete. If Reliance does not have all its approvals within this one year period it will lose its Rs20cr ($4.4m) security deposit with NTPC.

By contrast, we learn NTPC will not lose anything if its share of conditions precedent remains incomplete within this one-year period.