Can't wait for RNRL plant to come up to sell gas: RIL

Reliance Industries (RIL) said it has no legal right to wait for the power plant of Reliance Natural Resources (RNRL) to come up and then sell gas from the KG Basin D6 block as it was not permissible under the Production Sharing Contract to keep the gas reserved.

Also, according to Government rules, RIL has to sell the gas as soon as it is produced, RIL senior counsel, Harish Salve, told the Supreme Court in the gas dispute between the Ambani brothers on Tuesday.

Mr Salve told a Bench headed by the Chief Justice, K.G. Balakrishnan, that the Government wanted expeditious discovery, production and supply of gas due to the gas shortage in the country.

Denying that the Mukesh Ambani-led RIL had made an unconditional commitment to sell gas to the Anil Ambani-promoted RNRL for 17 years, he said RIL can supply gas only till its availability. Salve said according to the Production Sharing Contract, "I (Mukesh Ambani) cannot wait for my brother's (Anil Ambani's) power plant to come up and then sell the gas. I have to go by Government rules because I am not the owner of the gas, but only a contractor.

"The Government is the owner of the gas till the delivery point where it is sold to buyers. I (RIL) am only an agent and if I violate the PSC or the Gas Utilisation and Pricing Policy, I will be thrown out (of the D6 project)."

Mr Salve said RIL has no problem in supplying 28 mmscmd gas to RNRL, but the price of USD 2.34 per mBtu is subject to Government approval. He also said that RIL can give the gas to RNRL only for the power plants (Dadri and Patalganga) and not for any other purpose, including trading.

The senior counsel said that RNRL has alleged that due to the delay in gas supply by RIL, its power project has not taken off and therefore it (RNRL) wants the right to trade. However, the Bombay High Court (Single Bench and Division Bench) did not find that RIL has delayed RNRL's power projects.

Settlement talk

Salve dismissed as baseless media reports of the Ambani brothers mulling an out-of-court settlement. Talking to reporters after the pre-lunch session of the hearing, Salve said: "I met Mukesh (Ambani) on Thursday and he instructed me never to talk about any out-of-court settlement. He has asked me to continue with the arguments in court. So far, I haven't heard from him saying anything contrary to this."
Taken from Business Line