RNRL's pipeline project faces delay
RNRL had, in its application for the project, mentioned that it was sourcing gas from Reliance Industries' KG-D6 gas field and other companies in the Krishna Godavari basin.
By PTI |
NEW DELHI: The government is likely to ask Anil Ambani Group firm Reliance Natural Resources Ltd to show proof of tying up supplies before granting the company permission to build a natural gas pipeline from Kakinada to Dadri.
RNRL had, in its application for the project, mentioned that it was sourcing gas from Reliance Industries' KG-D6 gas field and other companies in the Krishna Godavari basin.
But since the Petroleum Ministry had rejected RIL's proposal to sell gas from KG-D6 to RNRL on grounds that the price was not arrived at arms-length basis, authorisation on the basis of the said agreement would not be given, an official said.
"Sourcing of gas has to be ensured," he said.
An RNRL spokesperson refused to comment.
Though RIL had signed a Gas Supply Master Agreement (GSMA) with RNRL for supply of 28 million standard cubic meters per day of gas, a firm Gas Sales Purchase Agreement (GSPA) could not be signed in the absence of approval of gas sales price from the government.
The usage of gas, according to GSMA, would only be for power generation. Other activities like city gas distribution, a license for which the Anil Ambani Group firm has applied for, find no mention.
Asked about the authorisation given to RIL to lay separate pipelines from Kakinada to Ahmedabad, Chennai and Haldia, the official said under the Production Sharing Contract (PSC) a producer has the right to lay pipelines for taking gas to consumers. However, the sale price would be governed by government policy.
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