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Govt may block KG gas flow to RNRL, NTPC

Fertiliser sector to get priority, RIL may have to import if it is required to meet any obligation.

, ET Bureau|
Sep 30, 2008, 04.59 AM IST
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NEW DELHI: The government may not allow Reliance Industries (RIL) to supply the Krishna-Godavari (KG) basin gas to Anil Dhirubhai Ambani Group (ADAG) company Reliance Natural Resources Ltd (RNRL) and public sector power firm NTPC in violation of the gas utilisation policy which accords priority to the fertiliser sector.

RIL may have to import gas in the form of liquefied natural gas (LNG) in the case it would be required to meet any contractual obligation.

���The (KG basin) gas is a natural resource belonging to the people of the country. RIL-NIKO combine are the contractors and they would have to supply gas to the priority sectors only, as specified by the Gas Utilisation Policy. If they (RIL-NIKO) wish to sell or supply gas to companies (read RNRL/NTPC), they are free to do so through imports (LNG),��� a source said.

Sources in the government say that there is no gas available for power sector (as per the gas utilisation policy). The gas demand for the fertiliser sector alone is assessed at 76.39 million standard cubic meter (MMSCMD) for 2011-12 and RIL���s KG basin gas production is only 40 MMSCMD.

The empowered group of ministers (E-GoM) had recently decided that the 40 MMSCMD gas from the RIL���s KG basin, expected from March 2009, would first be supplied to the existing gas-based fertiliser plants. The second priority is given to LPG plants and third to to those power plants that are lying idle and likely to be commissioned during 2008-09.

When contacted RIL spokesperson said: ���We do not wish to offer any comments on these matters since they are subjudice.��� An email query to ADAG remained unanswered.

Meanwhile, RIL chairman Mukesh Ambani visited the oil ministry on Monday and met petroleum secretary RS Pandey. The meeting assumes significance as a new bench of Mumbai High Court is set to hear RIL-RNRL gas dispute case on Tuesday. It is understood that Mr Ambani also discussed issues related to the KG basin gas with the oil secretary.

Officials in the ministry, however, maintain that the discussion was confined to sale of diesel from RIL���s export oriented refining unit to domestic tariff area (DTA).

Mr Ambani is learnt to have met top officials in law and finance ministries also. A source in the North Block said that Mr Ambani met finance minister P Chidambaram, department of economic affairs secretary Ashok Chawla and revenue secretary P V Bhide. When asked about the meetings, Mr Ambani pleasantly declined to comment saying ���not today.���

Meetings in the North Block went on till late in the evening.
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