NTPC Limited (NTPC) has decided to purchase natural gas from Reliance Industries Limited (RIL) but is resisted to pay marketing margin to RIL and wants to utilize the fuel at plants other than Kawas and Gandhar that were recognized by the government. The Indian government had assigned 2.67 million cubic meters of gas per day of natural gas from RIL's Bay of Bengal KG-D6 fields to NTPC. But NTPC has declined to sign a purchase agreement.

NTPC was primarily reluctant to take the allotment it had violently fought for, on grounds that it may compromise its court case against RIL for non-performance of a 2004 tender.

It has now consented to purchase the fuel but wants to re-discuss the terms, a senior official said. NTPC doesn’t want to pay $0.12 per million British thermal unit marketing margin and wants changes in penalty clause to make RIL liable for defaults.

Also, NTPC wants to utilize gas at plants other than Kawas and Gandhar, which were initially recognized by the government to use 1.76 mmcmd and 0.3 mmcmd gas respectively.

NTPC’s demand for changes in the gas sale and purchase agreement (GSPA) would not be achievable as uniform agreements have been signed with around two dozen purchasers in fertilizer and power sector on terms discussed by ministries of power, fertilizer and petroleum.