Court allows RIL to sell KG gas at interim price
The Bombay High Court allowed the Mukesh Ambani controlled Reliance Industries Limited to sell gas from its fields in the Krishna Godavari region to industrial consumers pending a court verdict at a government-approved price.business Updated: Jan 30, 2009 20:54 IST
The Bombay High Court on Friday allowed the Mukesh Ambani controlled Reliance Industries Limited (RIL) to sell gas from its fields in the Krishna Godavari (KG) region to industrial consumers pending a court verdict at a government-approved price.
The court had earlier stayed the sale of natural gas from the fields after two cases were filed against RIL over the sale price and quantity of fuel - one by the Anil Ambani-controlled RNRL and the other by state-owned NTPC.
Gas will be sold at the government approved price of $4.2 (Rs 206) per million BTU (british thermal unit) until a final judgement is given by the Court.
A division bench of the Bombay High Court comprising Justices J.N. Patel and K.K. Tated has been hearing the RIL-RNRL, a judgement on which is expected by March 15.
Petroleum secretary R S Pandey told the Hindustan Times that it was in the larger interests of the country that gas production from KG basin starts. “In the absence of production from the gas fields, flaring of gas would have meant a national loss.”
Reliance Industries, meanwhile, said that it would start gas production from the KG-D6 fields by mid-March and would enter into sales agreements with customers by end-February.
On its part, RNRL maintained that it would buy gas from RIL only at $2.34 per mBTU.
The empowered group of ministers on gas pricing and utilisation had decided early January that the gas demand of the power and fertiliser units would be met first before this gas could be used for other industrial purposes including the requirement of RIL’s own units such as its petrochemical plant.