The Anil Ambani-led Reliance Natural Resources Ltd (RNRL) has appealed to the Supreme Court to restrain Reliance Industries Ltd (RIL) from supplying natural gas up to 40 million metric standard cubic metres a day (mmscmd) to any party other than itself.
In a special leave petition (SLP) filed in the Supreme Court on Friday, RNRL requested the court to direct RIL to immediately start supply of 28 mmscmd (and an additional 12 mmscmd, if required) of gas to RNRL at $2.34 a metric British thermal unit (mBtu) for a period of 17 years in accordance with the June 15 judgment of the Bombay High Court. The SLP is expected to come up for hearing next week.
It asked the court to “...restrain RIL from supplying or entering into any contract for supply of natural gas for the amount of 40 mmscmd with any party other than the petitioner”.
The RNRL plea, if accepted, can lead to cancellation of supply to fertilizer and power companies. RIL has commitments with fertiliser, power and steel companies for supply of nearly 30 mmscmd. Among the fertilizer companies which may be affected are Nagarjuna Fertilisers and Chemical Ltd, Rashtriya Chemicals & Fertilizer Limited, IFFCO, KRIBHCO, GSFC, GNFC, Tata Chemicals Ltd, National Fertiliser Limited, Chambal Fertiliser & Chemicals Ltd, KRIBHCO Shyam Fertilisers Ltd, IndoGulf Fertiliser and Shriram Fertiliser and Chemicals Ltd.
RIL had also signed gas sales purchase agreement with Gautami Power, Gujarat Paguthan Energy Corporation, two phases of GVK Industries Limited, Konaseema Gas Power, Lanco Kondapalli Power, Maharashtra State Power Generation Company, Reliance Infrastructure, Torrent Power (Sugen and Vatva) and Vemagiri Power Generation.
RIL, which started gas production at its D6 block in April this year, has signed gas sales and purchase agreements (GSPAs) with fertiliser companies for supply of 15 mmscmd of gas and with power companies for supply of 11 mmscmd. A quantity of 3.75 mmscmd has also been committed to steel plants. These quantities have been committed in tune with the Union government’s gas utilisation policy.
While gas supplies to both the fertiliser and power companies is continuing uninterrupted as of now, concerns have been raised by the fertiliser industry over any possible disruption after the Bombay High Court order. The fertiliser ministry too wrote a letter to the petroleum ministry, seeking a re-assurance that gas supplies would continue uninterrupted.
On June 15, the Bombay High Court had directed RNRL and RIL to come to an agreement for the sale of 28 mmscmd of gas from the Krishna-Godavari basin’s D6 block at $2.34 a unit for 17 years.
Following this, RNRL wrote several letters to RIL, asking the latter to come forward to execute the order by signing an agreement. However, on Tuesday, in reply to a letter from RNRL, RIL had stated that it would not sign any agreement involving gas supply, price, quantity and tenure without government approval. RIL has also approached the Supreme Court to challenge the Bombay High Court order.
Our Chennai correspondent adds: Meanwhile, speaking on the sidelines of the inauguration of IOC’s ATF pipeline from its Manali refinery to Chennai airport, Additional Petroleum Secretary S Sundaresan said that the Bombay High Court order does not prevent the govt from doing anything it has been doing so far, which is allocation of gas as per policy.
“So, depending on what happens in the Supreme Court, if it is necessary, we will give our views,” he said, while refusing to comment further.
