Tuesday, May 18, 2010

RIL and RNRL started informal meeting over hammering out new gas supply agreement

After three years of legal struggle, the Ambani brothers restarted their negotiation over gas supply from Krishna-Godavari basin’s D6 block.

On May 18, 2010, Mukesh Ambani led RIL and Anil Ambani led RNRL started informal talks over hammering out a new gas supply agreement.

A reliable source said, "Two top officials of RIL and Anil Dhirubhai Ambani Group on Tuesday held preliminary discussions on a possible settlement of the gas dispute,"

Neither RIL, nor RNRL disclosed any information about the meeting.

On May 7, 2010, the Supreme Court announced that the family MoU, under which RIL was supposed to supply gas to RNRL’s Dadri Power plant in UP for 17 years, is not legally binding.

The family MoU created in 2005, says that RIL would supply RNRL gas from K-G D6 block at a price of $2.3 per mmbtu which was lower than government fixed price of $4.2 per mmbtu.

The court ordered that the gas should be allocated as per government rules and the Supreme Court gave a period of six weeks to renegotiate the deal.

The gas provided by RIL will be used to run RNRL’s 10,000 MW powerplant in Dadri UP.

The Supreme Court announced that RNRL would get gas in future according to the price fixed by the government. Any new agreement between RIL and RNRL must be in line with the Production Sharing Contract (PSC) and follow government policy.

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