RIL, RNRL begin talks on gas supply agreement | business | Hindustan Times
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RIL, RNRL begin talks on gas supply agreement

business Updated: May 18, 2010 21:29 IST

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Reliance Industries Ltd (RIL) and Reliance natural Resources Ltd (RNRL) on Monday began informal talks for a possible gas supply agreement, in line with a Supreme Court verdict earlier this month on the row between the two groups.

“Two top officials of RIL and Anil Dhirubhai Ambani Group today held preliminary discussions on a possible settlement of the gas dispute,” a source said.

However, no formal confirmation of the meeting and the issues discussed could be obtained from either groups.

The apex court had on May 7 rejected RNRL’s plea for cheap gas from RIL on the basis of a family agreement of 2005.

While ruling that the government was the owner of all gas until delivery to consumers and had the right to fix its price and users, the Supreme Court also asked the two sides to reach an agreement within six weeks.

RNRL was seeking supply of 28 million cubic meters per day of gas for 17 years at a price of $2.3 (Rs 107) per million metric British thermal unit (mmBtu) for Anil Dhirubhai Ambani Group’s (ADAG’s) greenfield power plant at Dadri in Uttar Pradesh, as opposed to the government-approved price of $4.2 (Rs 191) per mmBtu.

According to the Supreme Court verdict, RNRL can get gas in future, based on government allocation and pricing. The provisions of any new agreement are to be in line with the Production Sharing Contract (PSC) and the ambit of government policy.