RIL may not sell gas to RNRL for a long time

An RIL official had indicated that it might not sell gas from its KG-D6 fields to Reliance Natural Resources Ltd (RNRL) at $ 4.20 per mmBtu that too if the government allocates fuel to the Anil Ambani group firm for a long time. This is because the tenure of gas supply will have to be drastically cut from 17 years demanded by RNRL as the life of the gas fields is around nine years. The government had prioritised existing fertiliser and power plants. Future plants such as the proposed Dadri plant of the Anil Ambani group near Delhi was to be considered for allocation when the plant comes up. As the Dadri plant may not come up before three years,supplies cannot be for more than five years.

The RIL statement said the judgment of Supreme Court has set at rest numerous issues which had been raised in relation to the gas discovered and produced by RIL from the KG D6 field. RIL sincerely hopes that the clarity of findings of the judgment brings to a permanent closure the incessant distortion of facts and malicious allegations which were being levelled against the governments 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, it said.

RIL said it would renegotiate the gas supply agreements with RNRL in the manner and within the time-frame stipulated by the Supreme Court. The judgment has defined the extent of marketing freedom that RIL enjoys in the area of sale of natural gas produced, RIL said.

RIl said the judgment recognised the dominant role of the provisions of the production-sharing contract (PSC) and has upheld the policies formulated by the government under which it has the authority to regulate the production and distribution of natural gas. While the MoU may be kept in mind during the process of renegotiation,it is clearly held that the MoU is not binding. RIL has always held that it is bound by the provisions of the PSC and everything else would be subservient to this overriding agreement with the sovereign. The Supreme Court has unambiguously upheld this consistent stand of RIL, the RIL statement said.

RIL would like to assure all its shareholders that it remains committed to creating value for both shareholders and the nation. We are proud to state that even during this phase,RIL made investments of over Rs 40,000 crore and created the world-class KG D6 asset that India can be truly proud of. This shows our abiding commitment to creation of strategic assets for the country and value for our shareholders even in adversity, it said.