A division Bench of the Bombay High Court on Thursday deferred till July 12 the hearing on a plea by Mukesh Ambani-controlled Reliance Industries seeking vacation of a single-judge order that restrained it from finalising any agreement for selling gas from its Andhra offshore field, expected to start pumping from June next year, till a petition filed by Anil Ambani's Reliance Natural Resources Ltd is sorted out.
Thursday's hearing saw both sides trading charges, which could find an echo at Friday's meeting of the panel of secretaries tasked with suggesting a pricing formula for natural gas. No wonder, in course of the verbal duel, the court observed ‘‘each side was playing game".
Counsel for RIL said RNRL's petition against its move to arrive at a market-driven price for gas through bidding has been motivated by a desire to make a killing out of trading. ‘‘They really want to trade in the gas as they don't have a single power project at the moment," Harish Salve told the court.
RNRL counsel Mukul Rohatgi countered, saying it has received environmental clearance for the proposed 8,000 mw power plant at Dadri but it has not been able to tie up funds in the absence of firm gas supply commitment from RIL. He also opposed Salve's plea that the government be allowed to approve the price fixed through the bidding route at this stage. It could be used by RIL to deny RNRL gas at the lower price already fixed (as part of the demerger deal), he said.
As part of the demerger deal, RIL is to supply 28 million cubic metres a day of gas for RNRL's power plant. The price is to be benchmarked to what RIL had quoted to state-owned generation utility NTPC for supplying 12 million cubic metres three years back when oil was averaging $35/barrel. NTPC has separately dragged RIL to court over interpretation of liability clause in its tender. Crude has since climbed to $69/barrel and gas prices globally have risen, with power and fertiliser firms paying $5.70 mBtu (million British thermal unit) for supplies from the Panna-Mukta-Tapti fields.
RIL's argument is based on the fact that assuming all things are settled, it will take RNRL 3-4 years to set up. Against this, RIL is scheduled to start pumping gas from next June and will have to burn it in case it is not allowed to sell as gas cannot be stored.
Source: http://timesofindia.indiatimes.com/Bombay_HC_defers_RIL_gas_row/articleshow/2180078.cms
Thursday's hearing saw both sides trading charges, which could find an echo at Friday's meeting of the panel of secretaries tasked with suggesting a pricing formula for natural gas. No wonder, in course of the verbal duel, the court observed ‘‘each side was playing game".
Counsel for RIL said RNRL's petition against its move to arrive at a market-driven price for gas through bidding has been motivated by a desire to make a killing out of trading. ‘‘They really want to trade in the gas as they don't have a single power project at the moment," Harish Salve told the court.
RNRL counsel Mukul Rohatgi countered, saying it has received environmental clearance for the proposed 8,000 mw power plant at Dadri but it has not been able to tie up funds in the absence of firm gas supply commitment from RIL. He also opposed Salve's plea that the government be allowed to approve the price fixed through the bidding route at this stage. It could be used by RIL to deny RNRL gas at the lower price already fixed (as part of the demerger deal), he said.
As part of the demerger deal, RIL is to supply 28 million cubic metres a day of gas for RNRL's power plant. The price is to be benchmarked to what RIL had quoted to state-owned generation utility NTPC for supplying 12 million cubic metres three years back when oil was averaging $35/barrel. NTPC has separately dragged RIL to court over interpretation of liability clause in its tender. Crude has since climbed to $69/barrel and gas prices globally have risen, with power and fertiliser firms paying $5.70 mBtu (million British thermal unit) for supplies from the Panna-Mukta-Tapti fields.
RIL's argument is based on the fact that assuming all things are settled, it will take RNRL 3-4 years to set up. Against this, RIL is scheduled to start pumping gas from next June and will have to burn it in case it is not allowed to sell as gas cannot be stored.
Source: http://timesofindia.indiatimes.com/Bombay_HC_defers_RIL_gas_row/articleshow/2180078.cms