Anil Ambani-promoted Reliance Natural Resources asked the Bombay high court on Tuesday not to lift the stay on the sale of gas from Reliance Industries block in the Krishna-Godavari basin.
Mukesh Ambani-led RIL has sought to lift the sty as it claims it's ready to produce gas next month. Arguing before the court against vacation of the stay, RNRL senior counsel Mukul Rohatgi said, "There is no immediate supply of gas. Let the directorate general of hydrocarbons make a statement when the company is ready to produce the gas."
In May 2007, the Bombay HC in an interim order had asked RIL not to 'create third-party interest' for 40 mscmd (million standard cubic metres per day) of gas from the KG basin committed to NTPC and RNRL under their respective agreements with RIL.
Both the companies are seeking gas from RIL at $2.34 per mBtu and fighting a legal battle with RIL at the Bombay high court. The government approved price for the gas is $4.20 per mbtu.
RNRL also suggested that the initial gas production could be given to National Thermal Power Corporation.
"If production of the gas starts before the court pronounces a ruling in the case, let all the initial quantity of gas be given to NTPC," Rohatgi said.
"If the quantity of gas from the basin is more than 12 mscmd, the government can nominate a public sector undertaking to allot the gas. This shall be deemed as the government's share from the entire gas," he added.
Initial output from KG basin is said to be 15-25 mscmd, going up to 40 mscmd in four to five months and to 55 mscmd before the year-end. The peak output of 80 mscmd is expected in 2010.
Rohatgi also said he is moving a chamber summons asking for documents related to capex from RIL. "We believe the capex figures are hopelessly inflated," Rohatgi told reporters outside the court.
RNRL senior counsel Ram Jethmalani suggested that if the government forces NTPC to buy gas at $4.2 per mBtu, then it will cause NTPC a loss of around Rs 30,000 crore (Rs 300 billion).
"If NTPC buys the gas at $4.2 per mBtu shelling out Rs 30,000 crore (Rs 300 billion) to RIL, it will amount to corruption and its directors who accept this decision will be prosecuted on the basis of Prevention of Corruption Act," Jethmalani told reporters outside the court.
On the other hand, government counsel Mohan Parasaran said, "The empowered group of ministers applied their mind and fixed a uniform price (for sale of gas) across sectors.
There is no question of corruption as this decision has been taken in a transparent manner fixing priorities for distribution of gas and also fixing a uniform price to avoid discrimination."
The case has been adjourned till Thursday.
