Under Pressure

Mumbai, July 2: Reliance Industries Ltd (RIL) today filed an appeal with the Bombay High Court seeking a stay on an interim order given on June 21 that barred it from selling gas to third parties till 2016.

The court had said it could only supply gas to Anil Ambani-owned Reliance Natural Resources Ltd (RNRL) and state-owned National Thermal Power Corporation (NTPC). RIL was also permitted captive use of the gas from the Krishna Godavari basin.

RIL’s appeal was filed before a division bench headed by Chief Justice Swantra Kumar. The appeal will be heard on July 5.

It may be recalled that Justice A.M. Khanvilkar of the Bombay High Court had in response to a petition filed by Anil D. Ambani’s RNRL, said that RIL could not supply the gas to third parties, other than the three identified, in the first eight years of production.

The production of gas from the KG basin is expected to commence with 40 million standard cubic metres per day (mmscmd) from June next year and this will be further increased to 80 mmscmd.

On the same day, the single bench of the Bombay High Court is also expected to give its final view on RNRL’s petition.

Last month, RIL had invited bids from power and fertiliser companies with consumption of more than 1 mmscmd and falling on the route of its gas pipeline from Kakinada in Andhra Pradesh to Ahmedabad in Gujarat. But the Anil Ambani group, which claimed that half of the 80 mmscmd planned peak output from KG-D6 block was committed to RNRL as part of a family settlement, approached the court for a stay.

According to the family settlement, RIL was to supply 28 mmscmd of gas to the Anil Ambani group at $2.34 per million British thermal unit. It had also agreed to sell the 12 mmscmd of gas earmarked for NTPC after its agreement with the state-run power major collapsed.

RIL has, however, maintained that it has not created any third party interest in the KG basin gas as no contract has been signed with any buyer.