Jubilant RIL says will renegotiate gas supply pact | business | Hindustan Times
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Jubilant RIL says will renegotiate gas supply pact

business Updated: May 07, 2010 22:52 IST

PTI
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Buoyed by the Supreme Court verdict on the the legal dispute over the gas supply with Anil Ambani-led RNRL, Reliance Industries on Friday said it can sell gas only at a price approved by the Centre and to users identified by the government.

A much-relieved, RIL Chairman Mukesh Ambani asked his lieutenants to put the bitterness behind and focus on value creation for shareholders of his company.

RIL Executive Director P M S Prasad, one of the first to speak to Mukesh after the court verdict, told PTI that "Mukesh felt relieved after the judgement and asked us to put the bitterness behind and concentrate on value creation for shareholders... bitterness is not good for either side."

In a statement issued in the night, RIL said that it will renegotiate the gas supply agreement with RNRL in the manner and within the timeframe stipulated by the apex court.

"Supreme Court verdict recognises the dominant role of the provision of PSC and upheld the policy formulated by the government under which it has the authority to regulate the production and distribution of natural gas," it said.

In view of the findings of the judgement, RIL can sell gas only at the price approved by the government and only to the entities which have been allocated gas under the Gas Utilisation Policy, it added.

"RIL has no ability to deviate from price, quantity and tenure as determined under the government's policies, or to discriminate amongst various consumers," the statement further said.

RIL hoped "the clarity of findings of the judgement brings to a permanent closure the incessant distortion of facts and malicious allegations which were being levelled against the government's policies of regulating and developing the natural gas sector for the greater good of the people of India and in the interest of nations energy security."

The Supreme Court today ruled that Anil Ambani Group's Reliance Natural Resources Ltd (RNRL) cannot claim gas at concessional rate of 2.34 per million British thermal unit from RIL.

A three-judge bench, headed by Chief Justice K G Balakrishnan, said that the Ambani family MoU that sought to divide gas between group firms of the two brothers was not binding, both legally as well as technically.

The apex court asked the group firms of the warring siblings to sit together within six weeks and rework within the next eight weeks a gas supply agreement in conformity with the government policy.

The government has already fixed the price of gas from RIL's KG-D6 fields at USD 4.20 per mmBtu, compared to the USD 2.34 per mmBtu sought by Anil Ambani group firm RNRL.