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RIL, RNRL begin talks on gas supply

May 18, 2010 18:25 IST
Source:PTI

Reliance Industries and Reliance Natural Resources Limited began informal talks for a possible gas supply agreement on Tuesday, in line with a Supreme Court verdict earlier this month on the row between Mukesh and Anil Ambani groups.

"Two top officials of RIL and Anil Dhirubhai Ambani Group on Tuesday 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 group.

On May 7, the Supreme Court had rejected RNRL's plea for cheap gas from RIL on the basis of a private family agreement of 2005.

While ruling that the government was the owner of all gas until delivery to the 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 $2.34 per million British thermal unit for the

group's greenfield power plant at Dadri in Uttar Pradesh, as opposed to the government-approved price of $4.2 per mmBtu.

As per 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 and the ambit of government policy.

Source: PTI
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