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| RNRL asks RIL for meeting on key gas supply clauses |
| Kalpana Pathak / Mumbai Jun 25, 2009, 00:29 IST |
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In a sequel to the Bombay High Court order of June 15, Anil Ambani’s Reliance Natural Resources Ltd (RNRL) has written to Reliance Industries Ltd (RIL), its balky gas supplier, seeking a firm commercially bankable agreement on its Dadri power project.
It wants a meeting on on three clauses of the pre-existing gas sale master agreement (GSMA) between the two companies in this regard. The HC order had underlined the GSMA’s core provisions as argued by RNRL, while allowing RIL to also appeal against it or to discuss the issue with RNRL and come to an agreement. RNRL is now seeking such a meeting, to discuss the key clauses. Without this, it says, the dadri project won’t go forward.
The GSMA is disputed by RIL as not being valid; RNRL contends there was an agreement on these provisions. The three clauses it wants firmly in writing now relate to gas supply on: pricing (at $2.34 per million British thermal unit), quantity (28 million metric standard cubic metres of gas per day) and tenure of supply (for 17 years).
In its present form, says RNRL, the GSMA is a commercially non-bankable agreement, which has prevented RNRL from raising funds and bringing its power plant on course.
RNRL’s letter has also sought clarity on allotment of 12 mmscmd of gas if RIL’s agreement with power major NTPC falls through. As per the GSMA, RNRL would also be allotted another 12 mmscmd if an earlier agreement between RIL and NTPC fails. NTPC is fighting a case against RIL for buying gas for two of its plants - Kawas and Gandahar in Gujarat - at a price of $2.34 per mBtu.
“We need to have a bankable agreement in place for our Dadri project. We have written to RIL twice, claiming clarity on various issues which will allow us to have a clear and a bankable agreement,” Mukul Rohtagi, senior counsel, RNRL, told Business Standard. Adding: “The only response from RIL so far has been that it is studying the judgment.” (the recent one by the Bombay High Court on the issue).”
An RIL counsel, when contacted, said nothing has been decided on the matter.
Ram Jethmalani, senior counsel for RNRL, had earlier in court said that, “RIL has prevented RNRL from raising funds and bringing its power plant on course. The GSMA is a useless piece of paper.”
According to the GSMA, RNRL is entitled to supply of 28 million cubic metres of gas per day from KG basin at a price of $2.34 per million British thermal unit (mBtu), for a period of 17 years, the core measures which it now wants confirmed. The HC had directed RUIL on these lines, too.
RNRL has already filed a caveat before the Supreme Court to preclude the chances of an ex parte order (given without hearing it) being passed on the issue.
The court had also asked the parties to thrash out their differences and come up with a comprehensive agreement. Rohatgi was hopeful that the issue could be resolved by Ambani brothers with their mother’s intervention.
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