Nearly two weeks after the Supreme Court directed Reliance Industries (RIL) and Reliance Natural Resources (RNRL) to the negotiating table on a gas supply agreement, executives from both companies met today. On May 7, the SC upheld the government’s final word on gas production and supply decisions. It gave six weeks to secure an agreement on gas from RIL for RNRL’s power plant.
The renegotiations have to be within the framework of governmental policy and approval regarding price, quantity and tenure for supply. The government press note of November 16, 2009, committed gas allocation from RIL of 61.61 million standard cubic meters per day (mscmd) on firm basis and another 30 on a fall-back basis. Firm allocation entitles a company to first right on the gas while fall-back arrangement gives a temporary supply in the event of spare quantities being available.
Post the verdict, Anil Ambani, Chairman of the ADAG Group had said he looked forward to an “expeditious and successful” renegotiation with RIL within the stipulated six weeks.
