The Bombay High Court on Monday directed the Mukesh Ambani led Reliance Industries Limited (RIL) and Anil Ambani led Reliance Natural Resources to renegotiate their gas supply agreement within four months.
The agreement was regarding distribution of natural gas produced by Reliance Industries from its find in the Krishna-Godavari basin off the Andhra Pradesh coast. Reliance Industries wants higher prices for the gas because costs of hiring rigs, buying pipelines and construction materials have surged. The company on September 12 got government approval to sell gas to potential buyers at $4.2 per million British thermal units, close to its asking price.
“The new agreement should be suitable, marketable and bankable,” the court observed and directed the two parties to submit it within four months. An earlier interim stay on RIL creating third-party rights on the gas committed to RNRL will continue. The arrangement between Mukesh and Anil Ambani at the time of demerger was binding; the court could not intervene in the commercial aspects of the contract.