Reliance to sign gas sale agreements by Feb-end

With the Bombay High Court lifting a ban on the sale of natural gas from the nation's largest field, Reliance Industries is likely to ink gas sale agreements with customers by end of next month. Reliance is expected to start gas production from eastern offshore KG-D6 fields by next month-end and first sale may happen by mid-March. "Once the stay has been lifted, we now have to ask Reliance to detail out the production plan as to how much will be produced and when," Oil Secretary RS Pandey said here. Production planning would enable allocation of the fuel within the sectors already prioritised by the Government, he said adding simultaneously Reliance will finalise model gas sale agreement and ink sale deals before production starts by end of February. Initial gas would be used for testing systems and output by the end of first month which is expected to be between 5-15 million standard cubic meters per day. It will ramp up to 40 mmscmd by July/August. The Bombay High Court allowed Reliance to sell gas from KG-D6 at USD 4.20 per million British thermal unit in accordance with the Government's gas utilisation policy that gives top priority to fertiliser units followed by existing power plants. India faces acute shortage of natural gas and current availability of 105 mmscmd meets only 55 per cent of the demand. But Reliance was previously restrained from selling KG-D6 gas to any company other than Anil Ambani Group firms and state-run NTPC because of a dispute over price to the two. Pandey said the government intervened in the dispute to get the ban lifted so that the fuel-started fertiliser and power companies get natural gas.