BackRIL contests HC interim order on KG gas sale
RIL contests HC interim order on KG gas sale
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PTI
Mumbai: Reliance Industries is said to have filed a review petition in the Bombay High Court against a division bench order restraining it from selling natural gas from KG-D6 block off the east coast to anyone other than Anil Ambani Group and NTPC.
The petition is likely to come up for hearing on Monday, 2 July, industry sources said. An RIL spokesperson declined to comment.
A division bench of the High Court had in an interim order last month stated that the 81.6 million standard cubic meters of gas per day (the peak output planed from the field) is only for Anil Ambani Group firm Reliance Natural Gas Ltd, state-run NTPC or RIL’s captive use for the next eight years.
RIL is to begin production from the KG-D6 block, off the Andhra coast, from July 2008 with an initial output of 40 mmscmd that the company plans to ramp up to 80 mmscmd in less than a year.
The Bombay High Court in its interim order is reported to have stated that the the first priority should be given to NTPC for 12 mmscmd of gas from the block.
RNRL would have the second right for 28 mmscmd. Another 25 mmscmd is to be used by RIL for its captive use. The court is further reported to have given RNRL rights over another 16.6 mmscmd.
Sources said RIL would contest the entire output from KG-D6 being locked and would seek permission to sell at least the volumes not locked in the two-year-old family settlement.
According to the settlement between the brothers who split the Dhirubhai Ambani empire between themselves, RIL has to supply 28 mmscmd of gas to Reliance Energy at $2.34 per million British thermal unit (mBtu) and also sell the 12 mmscmd of gas earmarked for NTPC if its agreement with the power major collapsed.
Anil Ambani Group was to use the gas from KG-D6 as fuel in its mega power project at Dadri in Uttar Pradesh, but the project is running behind schedule and it may not be able to take deliveries when production starts in July 2008.
RNRL had last month sought an injunction from the Bombay High Court after reports surfaced that RIL had invited price quotes from power and fertiliser firms for sale of gas from KG-D6.
Post-bidding, RIL arrived at a price of $4.33 per mBtu for the gas — a rate which the company says will enable achieving a power generation cost of Rs2.50 a unit and help save Rs6,900 crore in fertilizer subsidy annually.
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