Bombay High Court resumes KG-Basin gas row hearingOctober 6th, 2008 - 11:27 pm ICT by IANS
Mumbai, Oct 6 (IANS) Reliance Industries Ltd opposed the suggestion for introduction of the Memorandum of Understanding between the Ambani brothers relating to the supply of natural gas from the KG-Basin during the hearing of the case in the Bombay High Court Monday.Counsel for RIL Harish Salve objected to a suggestion by Anil Ambani’s Reliance Natural Resources Ltd (RNRL), and said: “MoU as a document was never pleaded by RNRL and even now RNRL has not approached the court with an application seeking permission to introduce MOU into evidence.”
After a suggestion from Justice Patel that the parties should be looking to settle the matter through an independent agency, Salve said that RIL will not waive the condition precedent in the contract with RNRL that the seller (RIL) has to get the government’s approval for the base price.
“Since the government has declined to accept $2.34 (per mmbtu) as price for valuation, RNRL has to pay $4.2 per mmbtu,” he added.
However, RIL has not so far approached the government for price approval.
The dispute revolves around a pact between RNRL and RIL on which firm has the rights over the gas supplies and at what price.
The earlier interim order, in which the court restrained RIL from selling the gas or from entering into any contract with a third party, has lapsed. RIL was subsequently planning to start production from the basin.
The court had also restrained RIL from entering into contracts to sell the gas from this basin - known in official jargon as KG-D6 gas - with companies other than RNRL and the state-run National Thermal Power Corp (NTPC).
It had also asked the two sides to settle the dispute within four months, but they failed to reach an agreement within the stipulated timeframe.
RNRL has claimed at least half of the 80 million standard cubic metres of gas per day that is envisaged from the fields off the Andhra Pradesh coast - said to be the country’s biggest source of hydrocarbons today.