RNRL moves HC over RIL's KG gas deals

MUMBAI: Reliance Natural Resources (RNRL), a Reliance Anil Dhirubhai Ambani group company, has moved an application in the Bombay High Court alleging that RIL has signed MoUs with fertiliser and power firms to sell gas from the Krishna Godavari basin. RNRL claims that this is against the order of the Bombay HC, which restrained RIL from entering into any contracts to sell gas to third parties or create any third party interest with respect to the 80 million metric standard cubic meters per day (mmscmd) of gas likely to come from KG basin in the later part of 2008. Confirming the move, a source told ET, “We have passed a notice of motion in the Bombay High Court seeking to dismiss RIL’s appeal. RIL has signed MoUs with firms for KG basin gas sales. This is against the court order, which restrained RIL from selling gas from the KG basin.” An RIL source confirmed receiving a legal notice from RNRL but said it was based on false media reports and that there is no truth to it. An email sent to RIL remained unanswered till going to print. This moves comes at a time when RIL has objected to Anil’s bid to merge Reliance Communications with MTN, saying his permission is required for any sale of the family’s shares. Interestingly, June 18 will mark three years of historic demerger of India’s biggest corporate house by family matriarch Kokilaben. RIL is learnt to have signed an MoU with close to a dozen power and fertiliser firms across the states of Andhra Pradesh, Maharashtra, and Gujarat. These firms lie close to RIL’s network of East-West pipeline being set up by another Mukesh Ambani company, Reliance Gas Transportation and Infrastructure (RGTIL). Sources said these are just initial MoUs will be converted into commercial agreements only if the court order is favourable to RIL. The next hearing will be on July 22 when the court resumes after vacation. The sale of gas will be as per the benchmark price approved by the government at $4.2 per mmbtu. RIL will be commencing commercial production of gas from the KG basin within a couple of months and is desperate to sign the gas sales contract as it can not delay production. Sources said the MoUs are being signed in line with proposed gas utilisation policy of the government, which has been finalised and is likely to be announced soon.
18 Jun, 2008, 0153 hrs IST,Piyush Pandey, ET Bureau
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