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No gas supply pact with RNRL: RIL

Last updated on: January 14, 2009 19:00 IST

Mukesh Ambani-led Reliance Industries' lawyer told Bombay high court on Wednesday that the company had not signed an MoU with Anil Ambani's group firm Reliance Natural Resources for gas supply.

The MoU says the gas supply agreement is with Reliance Energy and for the Dadri power project, senior counsel Harish Salve representing RIL said. "Nowhere does it say that the gas will go to RNRL," Salve told the division bench of Justices J N Patel and K K Tated.

"28 mmscmd of gas is specific for Reliance Energy at NTPC price".

State-run NTPC too has filed a separate suit against RIL, seeking that the Mukesh Ambani company execute the contract of gas supply. RIL has denied that the contract with NTPC was formalised.

The high court is hearing a dispute between RIL and RNRL over supply of gas from the former's eastern offshore Krishna Godavari D6 field to the latter.

Salve alleged that RNRL had 'changed key expressions in the MoU and excluded them from court submissions'.

He said in the MoU for gas supply, RNRL had replaced 'REL' with 'ADAG' (Anil Dhirubhai Ambani Group), because it wanted to 'trade' the gas and make profits.

"We offered to sign an agreement with the Dadri power plant," he said, adding RIL had "never refused the Dadri project a bankable agreement".

RIL is to start pumping gas from the KG-D6 field from next month and will produce 60 million standard cubic metres per day (mmscmd) by year end.

Salve said under the Draft Supply Agreement, 12 mmscmd of D6 gas would first go to NTPC.

While Reliance Energy would get the next tranche of 28 mmscmd, the remaining 20 mmscmd would be used by RIL for its captive consumption.

He said the breakup for the allocation of gas when RIL pumps 100 mmscmd would be such that 12 mmscmd would go to NTPC, 28 mmscmd to REL, and 25 mmscmd would be used by RIL itself.

The next tranche of 16.67 mmscmd would go to ADAG. The balance 18.33 mmscmd of gas would be shared in a ratio of 60:40 by Mukesh Ambani's RIL and Anil Ambani's ADAG.

Salve told the court that Kokilaben, mother of Mukesh and Anil Ambani, reserves the right to intervene and ADAG can claim damages if anything were to happen in bad faith.

In the separate suit that state-run NTPC has filed against RIL, the power generator is due to get gas from KG basin at $2.34 per mmBtu.

NTPC is seeking that RIL execute the contract of gas supply, but RIL denies the contract with NTPC was formalised.

RNRL says it is also entitled to get gas from RIL at the same price as NTPC.

On Tuesday, however, additional solicitor general Mohan Parasaran, told the court that NTPC would not be allowed to buy gas at lower than $4.20 per mmBtu.

Parasaran is appearing on behalf of the government, which has intervened in the case and is seeking the stay on production of gas from KG-D6 be lifted.

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