KG basin gas: Bombay HC to decide on July 12

The Bombay High Court will give its final verdict on the allocation of Reliance Industries Ltd's (RIL) gas from the D-6 block in the Krishna-Godavari basin on July 12.

RIL is set to start production from the block in June 2008, with around 26 million cubic metres a day (mcmd) and ramp it up to a peak of 80 mcmd by mid-2009.

The 80 mcmd of gas from the block would be enough to meet the country's current demand of around 170 mcmd.

Only half the demand is met at present.

The court, in an interim order on June 20, had restricted RIL from selling gas from the D-6 block to any buyer other than Reliance Natural Resources Ltd (RNRL) and NTPC for a period of eight years.

Of the 80 mcmd production, 12 mcmd is for NTPC's Kawas-Gandhar power plant, while 28 mcmd will go to RNRL for Reliance Energy Ltd's (REL) Dadri power plant in Uttar Pradesh.

Both RIL and RNRL presented their arguments before the high court. While RIL argued that it should be allowed to sell gas to a third party, RNRL lawyers said the gas was meant solely for REL's 7,000-Mw Dadri plant.

Typically, construction of a power plant takes around three years, while production of gas from the K-G basin is expected to begin in a year.

The government too is waiting for the court's order as it has yet to decide on whether it would take its share of the gas in cash or kind.