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Financial Express (India): NTPC says no to Shell LNG offer

Financial Express (India): NTPC says no to Shell LNG offer 

 

ANUPAMA AIRY

Posted online: Monday, May 22, 2006 at 0107 hours IST     

  

NEW DELHI, MAY 21:  National Thermal Power Corporation (NTPC) has turned down Shell’s offer to supply LNG at $10.41 per mmbtu for its power projects in Gujarat.

 

NTPC is currently procuring naphtha at $18.69 per mmbtu for fuelling some of its power projects.

 

Having failed to make much headway in convincing NTPC to buy its LNG, Shell has sought the power ministry’s intervention to make the state-owned power major see reason in buying LNG at $10.41 per mmbtu. Even the Prime Minister’s Office has asked NTPC to evaluate Shell’s offer.

 

NTPC has, however, termed the Shell offer as “highly opportunistic”. In a strongly-worded missive to the power ministry, NTPC said, “In the prevailing conditions of acute mismatch between the demand and supply of natural gas in the country coupled with the absence of a developed gas market, such an offer from Shell Hazira solely aims at maximisation of its profits at the cost of consumers.”

 

It further said that sourcing of gas at such high prices, even for the short term, would set incorrect benchmarks, thereby affecting the sourcing of gas for Ratnagiri Gas and Power Private Limited (RGPPL) at the targeted prices set by the government.

 

• NTPC termed the offer as ‘highly opportunistic’, saying it aims at maximisation of Shell’s profits at consumers’ cost

 

“Accepting such an offer from Shell would jeopardise the scheme of revival of RGPPL, adversely affecting its commercial viability,” NTPC said.

 

NTPC sources said the company was close to signing a deal with Petronet LNG Limited for around one mmscmd of RLNG at a much lesser price. “Procuring LNG from Shell at this price will have massive implications for all our future gas sourcing deals,” an NTPC source said.

 

No DEAL

• Shell had offered to supply LNG at $10.41 per mmbtu for NTPC’s power projects in Gujarat

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