15th August deadline for NTPC-Reliance gas contract

Vol 8, PW 8 (14 Jul 04) News in Brief

Reliance and NTPC hope to sign a formal contract for supply of gas to the Kawas and Gandhar power stations in Gujarat by 15th August this year Indias independence day.

Under the terms of the Letter of Intent to Reliance on 14th June, the gas supply contract must be signed within 60 days. Both sides are using the intervening period to meet various conditions precedent.

Reliance must begin supplying NTPC with 3m t/y natural gas over 17 years within 28 to 40 months of all the conditions precedent being met. If both sides feel comfortable, a firm gas supply date will be mentioned in the contract itself, reveals a source.

Otherwise the outer limit for gas supply is 40 months. Late May, Reliance bid $2.97 per mmbtu at gross heating value (inclusive of transportation costs) in a global gas and LNG tender to fire the expansion of the Kawas and Gandhar power stations.

Reliance will lay a 1,400-km cross-country pipeline to transport gas from its KG basin discovery to the NTPC power plants.