Ambani companies sign revised gas pact

Ambani companies sign revised gas pact
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First Published: Fri, Jun 25 2010. 03 17 PM IST
Updated: Fri, Jun 25 2010. 03 17 PM IST
Mumbai: Anil Ambani’s Reliance Natural Resources has signed a revised gas supply agreement with energy major Reliance Industries, controlled by his brother Mukesh Ambani, the companies said, sending Reliance Natural shares up more than 6%.
The companies did not disclose the terms of the new pact. A disagreement over terms of an earlier gas pact had been at the heart of a long-running feud between the billionaire brothers.
TV channels, citing sources, said the pact entails Reliance Industries supplying 28 million metric standard cubic metres a day of gas for 17 years to Reliance Natural for a government-set price of $4.2 per million metric British thermal unit (mmBtu).
In May, the Supreme Court ruled in favour of Reliance Industries, ordering the two companies to renegotiate a gas supply pact within six weeks.
The brothers had since taken a step towards reconciliation, ending an agreement that banned them from competing on the other’s turf.
The previous agreement between the two companies was based on a price of $2.34 per mmBtu the brothers agreed on in 2005.
Shares in Reliance Natural extended gains to more than 6% after the announcement in a subdued market. By 1.30pm, the stock was up 4.9% at Rs67, while shares in Reliance Industries, India’s largest listed company, were down 0.3% at Rs1,048.50.
The Reliance Natural statement said the company would request the Indian government to allocate natural gas.
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First Published: Fri, Jun 25 2010. 03 17 PM IST