RNRL demands Rs 50k crore to scrap agreement with RIL

Anil Ambani-promoted Reliance Natural Resources (RNRL) on Tuesday demanded Rs 50,000 crore from Mukesh Ambani-owned Reliance Industries (RIL) to scrap the so-called gas sale master agreement (GSMA) signed between the two companies.

RNRL counsel Mukul Rohatgi, beginning the company’s argument at the Bombay High Court over the supply of gas from the Krishna-Godavari Basin, said, “Somebody decide that my demands are correct or else calculate and compensate me for the gas I should have got for 17 years.”

RNRL has blamed RIL for delaying its power project in Dadri because the Mukesh Ambani- controlled company hasn’t assured them of regular gas supply.

According to GSMA, RNRL is entitled to a supply of 28 million cubic metres of gas per day from KG basin at a price of $2.34 per mmbtu for 17 years.

Rohatgi argued, “RIL is frustrating our scheme in putting up our power plant by claiming that it will not be able to supply 28 mscmd gas to us for 17 years.

We can’t set up a power plant for five years with an investment of Rs 30,000 crore unless we get an assurance of constant gas supply. RIL’s claim that they are not sure of the gas reserves is absolutely false. Their American exploration partner Niko has said the reserves are five times more than what they have quoted in the court.”

Concurring that the GSMA is a commercially non-bankable agreement, Ram Jethmalani, senior counsel for RNRL said, “RIL has prevented RNRL from raising funds and bringing its power plant on course. The GSMA is a useless piece of paper.”

Jethmalani added that RIL is very well aware of the family agreement (MoU) signed between the two brothers and the court shall call for the MoU from them.

“Mukesh Ambani should be prosecuted for criminal breach of trust and perjury as the drafts of GSMA and GSPA (gas sale and purchase agreement) were approved by the RIL board at a time when the board of RNRL was also under the control of Mukesh Ambani.

“The agreement thus, in effect, was signed between Mukesh Ambani and Mukesh Ambani as RIL and its subsidiary, RNRL, was controlled by Mukesh Ambani,” Jethmalani added. The matter stands adjourned till August 21 for continuation.

Last week, arguing for RIL, senior counsel Harish Salve had termed the agreement between the brothers as a ‘ghost MoU’.

He said RIL would lose around $1 billion (Rs 4,300 crore) a year if it sells gas to RNRL at the agreed price of $2.34 per million British thermal unit (mBtu).