Mumbai: Reliance Industries Ltd (RIL) has indicated that it may offer 12 mmscmd, the committed gas to NTPC, at about $6 per mmbtu, although with a rider that about eight mmscmd of this may be diverted to the Dabhol power project in Maharashtra while the balance could be used by NTPC.

The worsening power situation in the country seems to have opened the possibility of an out-of-court settlement in the RIL-NTPC gas imbroglio.

Several power plants in the country, including the Dabhol plant in Maharashtra, are operating below capacity for want of fuel. Government and political pressure has been building up to find a solution to the stalemate over gas supplies since RIL will be entering the market by early 2008 with a significant volume of gas.

However, sources said NTPC is not in favour of mixing the gas supply issue with the Dabhol project. Both RIL and NTPC declined to comment on the development. NTPC officials have held that the company is not in a position to comment as the matter is sub judice.

RIL, which won the bid as the fuel supplier for NTPC''s Kawas and Gandhar power projects, had committed to supply 12 mmscmd of gas. The matter, however, is now in court.

Differences had cropped up between RIL and NTPC over clauses in the gas supply agreement.

NTPC, which is a co-promoter with Gail India for the Dabhol power project, is also trying hard to secure gas supplies for the power project. It is not clear whether NTPC will settle for this gas.

Though the price indicated by RIL ($6 mmbtu) is substantially higher than the committed price quoted by the company at the time of winning the bid ($2.97 per mmbtu), it is significantly lower when compared to that of alternative fuels like LNG from spot markets which come at prices close to $10-$11 per mmbtu.