Reliance Industries (RIL) has finally agreed to sign a gas supply contract with Essar Oil.
In July, RIL had declined to sign the agreement, saying it did not want to commit gas more than it could produce from its Krishna-Godavari (KG) basin. It had allocated 0.6 million standard cubic metres per day (mscmd) gas from its KG-D6 fields to Essar Oil’s Vadinar refinery.
“RIL will sign the gas sale and purchase agreement (GSPA) with Essar Oil for the latter’s Vadinar refinery as decided by the empowered group of ministers,” said a spokesperson at RIL.
RIL had said its KG-D6 fields could sustain production of only 60 mscmd, against 64 mscmd of allocation the government had made to power plants, fertiliser units, refineries and steel plants.
RIL has already signed GSPAs for the 60 mscmd output it can sustain. It did not want to sign any more GSPA, as it did not want to commit and then default on supplies.
