EGoM fails to decide on KG-D6 gas allocation

In its first meeting after the Supreme Court verdict on the Ambani brothers’ gas dispute, an empowered group of ministers (EGoM) today failed to decide on allocation of gas from Mukesh Ambani’s KG-D6 gas field to commercial entities, including Reliance Power, an Anil Ambani company.

“The Ministry of Petroleum and Natural Gas will indicate the future gas availability to the Department of Fertilizer and Ministry of Power and invite their proposals for commercial utilisation of gas. Appropriate proposals will be put up before the EGoM,” said Petroleum and Natural Gas Secretary S Sundareshan.

EGoM, headed by Finance Minister Pranab Mukherjee, presides over allocation of natural gas from fields allotted under the New Exploration and Licensing Policy.

In its earlier meetings, EGoM had stated that allocations to projects in the pipeline would be made as and when they were ready to begin production.

The Supreme Court had directed Mukesh Ambani-led Reliance Industries Ltd (RIL) and Anil Ambani group firm, Reliance Natural Resources Ltd (RNRL), to renegotiate their earlier gas sale master agreement (GSMA), under which RNRL claimed 28 million standard cubic metres of gas a day (mscmd) for 17 years at a price of $2.34 per million British thermal units. Both the companies have signed a revised GSMA.

Following the signing of GSMA, Reliance Power had sought 28 mscmd for its four power plants at Dadri in Uttar Pradesh, Shahapur in Maharashtra’s Raigarh district, Jambusar in Gujarat and Samalkot in Andhra Pradesh.

Sundareshan said the EGoM was informed about the Supreme Court decision in the RIL-RNRL case, wherein the apex Court upheld the government’s right to allocate gas, fix price and decide on utilisation.

The group also decided to re-allocate about 2.4 mscmd of RIL-operated D6 block gas to customers in the Uran region of Gujarat with gas from ONGC’s C-series fields due to the region’s proximity to C-series and lower transportation cost. The EGoM has decided to cancel allocation of 0.4 mscmd of D6 gas to ONGC’s LPG plants because ONGC can now get gas for LPG extraction from its C-series production.