An Anil Ambani group firm today announced that it signed an agreement for availing of gas from Mukesh Ambani-led RIL in accordance with a Supreme court direction ,but supply will be subjected to government approval.The announcement of the deal comes within weeks of the warring brothers signing a truce agreement for creating a "harmonious environment of cooperation and collaboration" between their respective groups.
Shortly after the deal was signed today between Mukesh- led RIL and Anil group firm RNRL, the agreement was submitted to the government for necessary action, Oil Ministry sources said but clarified that neither any quantity, duration of gas supply, specific project nor price was mentioned. Although neither sides gave details of the revised gas supply agreement, sources in Reliance Natural Resources Ltd said that it is for a period of 17 years for projects totalling 8,400 MW at a government determined price of $4.2 per mmBtu.
When contacted, RIL spokesperson declined to give details saying that the contract was as per the direction of the Supreme Court and in accordance with government's policies.
The government has fixed a price of $4.2 per mmbtu for five years for gas from RIL's KG D-6 fields.
The government sources further clarified that it was the master agreement about the intent to supply gas and any specific details ranging from pricing to tenure and projects could be contained only in GSPA. It may be recalled that only last week the oil ministry officials were reported to have said that any gas supply to Anil's group firm could be only closer to commissioning of any project. They, however, said today that it was for the Empowered Group of Ministers to see if an exception can be made for Anil Ambani group and gas could be reserved for his project.
RNRL had gone to court against RIL in 2006, seeking 28 mmscmd of gas for its proposed Dadri plant at a rate of $2.34 per mmBtu - a demand which was rejected by the Supreme Court citing that government had the last word on utilisation and pricing of gas. The government fixed price for gas from RIL's KG-D6 fields is $4.20 per mmBtu.
"With legal dispute (over supply and pricing of natural gas from RIL's Krishna Godavari basin fields to Anil Ambani Group's power plants) behind us, we look forward to a harmonious and constructive relationship with Anil Dhirubhai Ambani Group (ADAG)," Mukesh Ambani had said at RIL's Annual General Meeting on June 18. He had also said that "as and when the power plants of ADAG are ready to receive gas, we would commence supplies to them subject to government granting allocation."
The two brothers reconciled their differences on May 23, when they scrapped a non-compete agreement that allowed flexibility to expand into areas hitherto reserved for each of them and aimed at "creating overall environment of harmony, cooperation and collaboration between the two groups."
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