Bombay HC asks govt to clarify gas price

In an interesting development to the Reliance Industries-Reliance Natural Resources Ltd case, the division bench of the Bombay High Court has asked government counsel Mohan Parasaran to clarify the price at which gas from the Krishna-Godavari basin block would be sold to government. This was in respect to the long pending dispute between Reliance Industries and Reliance Natural Resources over the supply of gas, where the government is acting as an intevener. Justice J N Patel of the division bench sought to know from the government, the price at which the state-owned National Thermal Power Corporation will be buying gas from RIL, as the RIL-RNRL gas sales purchase agreement is based upon the RIL-NTPC gas sales purchase agreement. Government counsel Mohan Parasaran replied: "NTPC has yet to come for approval, we will ensure a level playing field." The government will file its reply on Tuesday as the price may have a direct bearing on NTPC, which is also engaged in another legal battle with RIL on supply of gas. NTPC is fighting a case in the Bombay High Court against RIL, seeking the Mukesh Ambani-owned company to honour its gas sales agreement, which is not related to pricing. RIL through an international competitive bid agreed to supply 12 million metric standard cubic meters per day (mmscmd) of gas to NTPC, at $2.34 per mmbtu for 17 years. The government through an empowered group of ministers (EGOM) has approved a benchmark price of $4.2 per mmbtu for sale of gas from RIL's KG basin fields. However, this decision was without any pre-judice to the RIL-RNRL and RIL-NTPC case. Referring to the court order, RIL counsel Harish Salve told ET: "It's good for us, if the court lifts stay and directs RIL to sell gas to a government company. We can sell entire KG basin gas to GAIL at price of $4.2 per mmbtu. RIL's $10 billion is stuck in the KG basin project. We need to recover the money."