Fertiliser firms approach regulator over K-G basin gas

The Fertiliser Association of India (FAI) has sought the Petroleum and Natural Gas Regulatory Board’s (PNGRB’s) intervention to resolve issues that have cropped up between the fertiliser companies and GAIL India over the supply of gas from Reliance Industries’ Krishna-Godavari (K-G) basin.

The FAI has approached PNGRB over two main issues — the force majeure clause and annual maintenance shutdown period.

Confirming that the FAI had approached it, PNGRB said it would look into the matter. “We are seeing if there is a regulatory issue here. We also have to consider gas supply to city gas (projects) and power companies in case of the annual maintenance shutdowns,” a senior PNGRB member told Business Standard.

Force majeure is a common clause in contracts which essentially frees both the parties from liability or obligation when an extraordinary event takes place beyond the control of the parties.

“GAIL has included some trivial issues as part of the force majeure clause. We have asked GAIL to narrow it down. The variety is too wide and does not make sense for fertiliser companies,” said a senior official from Indian Farmers Fertiliser Cooperative (Iffco).

The fertiliser companies are slated to sign gas sale and purchase agreement with Reliance Industries this Friday, the official added.

Gas will be delivered to the fertiliser companies through the pipeline network of Reliance Gas Transportation Infrastructure (RGTIL) and Gujarat State Petronet and GAIL India (through its Hazira-Bijaipur-Jagdishpur pipeline).