Govt wants its RIL KG basin gas share in kind

But distribution estimates show there isn't any gas left for the Centre.

The government is considering taking its share of gas from Reliance Industries' D-6 block in the Krishna-Godavari basin in kind rather than in cash.

Sources say internal notes have been sent to advise the petroleum ministry to take its share of the gas as gas. This creates a complex situation as there isn't any gas available for the government.

According to last week's order of the Bombay High Court, the entire production of 80 million cubic metres a day (mcmd) from RIL's block in the KG basin is already locked up.

The court in its order says, "There is a clear identified distribution of up to the first 81.6 mscmd of the gas, production of which is to commence from next year."

According to the order, the first priority will be given to NTPC for 12 mcmd of gas from the block. The next preference will be Anil Ambani's Reliance Natural Resources Ltd (RNRL) for 28 mcmd gas. "The next order of priority... is a quantity equivalent to a maximum of 25 mscmd... shall be utilised by RIL for captive consumption purposes of itself and its affiliates," says the order.

This leaves just 15 mcmd. However, the court says that RNRL has further rights to 16.6 mscmd.

The high court order thus leaves no share of gas for the government to take in kind.

When contacted, an RIL spokesperson said the government had never indicated that it wanted the gas in kind. "It always spoke of taking its share in cash," he added.

A source said, "RIL has other plans if the government wants to take its share in kind. The company has the option and the necessary infrastructure to ramp up peak production from the present 80 mscmd to 120 mcmd, a likely scenario in 3-4 years."

RIL, however, said it would wait for the final high court hearing on July 5 before taking a final decision.