Govt likely to ask Bombay HC to allow interim sale of RIL’s KG gas

NEW DELHI: The government may appeal to the Bombay High Court to allow distribution of Reliance Industries��� (RIL) Krishna-Godavari (KG) basin gas through public sector Gail India���s pipeline so that the national resource can be used by gas-starved industrial units. Concerned over the on-going court battle between the Ambanis over the KG gas, and the consequent delay in its production, the empowered group of ministers (EGoM) on Thursday billed it as one of the interim solutions.

The government may request the court to vacate the injunction that prohibits RIL from selling the gas till its final verdict. The court had recently allowed the government to be a party in the case between RIL and Reliance Natural Resources (RNRL) on issue.

Sources said the EGoM was of the view that RIL���s gas dispute with RNRL and NTPC could best be resolved by the court. However, some EGoM members felt that the gas was a national asset and dispute between the contractor (RIL) and disputed buyers (NTPC and RNRL) shouldn���t stop its production. The government should request the court to allow production of the KG basin gas in national interest and its sale to companies as per the government approved price ($4.20 per mmBtu) and the gas utilisation policy. A source said until the disputes are resolved, the government could be allowed to sale the gas through its company Gail. Oil ministry sources said the minutes of the Thursday EGoM meeting are yet to be finalised and the view regarding sale of gas through Gail���s pipeline network is under consideration.

The EGoM is headed by external affairs minister Pranab Mukherjee and includes finance minister P Chidambaram, law minister HR Bharadwaj, oil minister Murli Deora, power minister Sushilkumar Shinde, steel minister Ram Vilas Paswan and corporate affairs minister Prem Chand Gupta. The EGoM also discussed the fuel issue of Ratnagiri Gas & Power (erstwhile Dabhol power). Some members said indigenous (KG basin) gas should be supplied to the plant, especially in the view of high prices of spot liquefied natural gas (LNG). LNG in spot market is stated to be at $22 per mmBtu.

The EGoM, while considering the agenda item on approving the disputed price at which RIL would sell 12 million cubic meters gas per day to NTPC, offered no comment as the matter was sub-judice.