Sources say negotiations have fallen through after Petronet LNG refused to accommodate NTPC's plea of a 26 per cent stake in the consortium.

NTPC will go ahead on its own to meet the LNG needs for its power plants. The navaratna has decided to float global tenders and invite bids from leading domestic and international fuel suppliers. Linkages will be finalised with the fuel supplier based on the cost quoted in the bids, sources say.

The public sector giant will also appoint an international consultant who will help it prepare bid documents and work out technical and financial modalities related to the selection of the supplier, sources say.

When contacted NTPC chairman and managing director Rajendra Singh confirmed the move and said his company would not settle for anything less than a 26 per cent stake.

Singh said if the arrangement did notsuit Petronet LNG, NTPC would go ahead on its own. The navratna will float tenders to meet the gas needs of its projects. "Although we have not received any formal communication from Petronet, I have been informally told that they will not offer NTPC a 26 per cent stake in the joint venture," he said.

While, in contrast to its earlier offer of giving NTPC a 10 per cent equity stake, Petronet LNG is believed to have agreed on offering NTPC a 16 per cent stake. Singh said NTPC needed to appoint a consultant as the navaratna was buying LNG for the first time through the bidding route. The consultant, he said, would assist NTPC in sewing up the nitty-gritty. Given that the cost of LNG is much cheaper than naphtha and other fuels and that its cost is comparative with that of imported coal, NTPC will set up a series of LNG-based power plants to be set up in Gujarat and other southern states in the coming years.

Petronet LNG, the company formed by the four premier public-sector oil companies, including Oil andNatural Gas Corporation, Indian Oil Corporation, Bharat Petroleum Corporation and Gas Authority of India, which together hold a 50 per cent equity stake in the company, had offered NTPC a 10 per cent share. This would have lead to a reshuffle in the equity holdings of these oil companies from the existing 12.5 per cent to 10 per cent each.