Govt keen on GAIL as gas marketer; RIL disapproves

Govt keen on GAIL as gas marketer; RIL disapproves
PTI
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First Published: Mon, Jan 19 2009. 02 59 PM IST
Updated: Mon, Jan 19 2009. 02 59 PM IST
New Delhi: The government is keen on appointing state-run GAIL India as the exclusive marketer for natural gas from Reliance Industries’ eastern offshore KG-D6 block but the firm has opposed the move on the grounds that it runs contrary to marketing freedom guaranteed under NELP.
“We are of the view that the injunction on sale of gas from KG-D6 has to be lifted at the earliest. The nation is going through a very difficult economic slowdown and gas from KG-D6 can fuel growth in key sectors like power and fertiliser,” a senior petroleum ministry official said.
RIL will be ready to start producing gas from KG-D6 by February but it may not be able to sell it as the Bombay high court has restrained the company from selling the fuel to any company other than Anil Ambani-led Reliance Natural Resources Ltd (RNRL) and state-run NTPC Ltd.
RNRL, by virtue of a family agreement, and NTPC, on the strength of an unsigned contract of 2005, claim 40 mmscmd gas from D6 and has taken RIL to court to get their share.
“If courts agree, we can appoint GAIL as marketer pending settlement of the legal disputes,” the official said.
The move is, however, not acceptable to RIL, which says its contract for KG-D6 under the New Exploration Licensing Policy (NELP) guarantees “marketing freedom, subject to the gas utilisation policy of the government”.
GAIL was RIL’s competitor in oil and gas exploration and could not be accorded “preferential treatment” and any such step would vitiate the level playing field that was being promoted through the NELP rounds, the official said, citing a letter the company has written to the petroleum ministry.
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First Published: Mon, Jan 19 2009. 02 59 PM IST