Mukesh Ambani's Reliance Industries has denied any pact with Anil Ambani Group's Reliance Natural Resources Ltd (RNRL) for the sale of natural gas from the Krishna-Godavari basin off the Andhra Pradesh coast.

Senior counsel for Reliance Industries Harish Salve told the Bombay High Court that a memorandum of understanding was entered into with another Anil Ambani group company, Reliance Energy, for the Dadri power project in Uttar Pradesh and none with RNRL.

According to Salve, the 28 million standard cubic metres per day (mmscmd) of gas is specific for Reliance Energy at NTPC price of $2.34.

Salve said under the draft supply agreement, 12 mmscmd of D6 gas would first go to NTPC. While Reliance Energy would get the next tranche of 28 mmscmd, the remaining 20 mmscmd would be used by RIL for its captive consumption.

Also owned by the Anil Ambani group, Reliance Energy is  an electricity distribution utility, supplying power to the Mumbai suburbs amongst other things. Reliance Energy has an aggregate estimated revenues of Rs9,500 crore ($2.1 billion) and total assets of Rs10,700 crore.

Reliance Energy distributes more than 21 billion units of electricity to over 25 million consumers in Mumbai, Delhi, Orissa and Goa, across an area that spans 124,300 sq.kms. It generates 941 MW of electricity, through its power stations located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa.

Reliance Energy is currently pursuing several gas- , coal- , wind- and hydro-based power generation projects in Maharashtra, Uttar Pradesh, Arunachal Pradesh and Uttaranchal with aggregate capacity of over 12,500 MW. These projects are at various stages of development.

The markets had risen sharply yesterday on rumours of a out of court settlemet between the two brothers. However RIL has denied any settlement.

Mohan Parasaran, the additional solicitor general of India, had said on Tuesday that the gas from the Krishna-Godavari block would be available to all private and public sector firms at not less than $4.20 per million British thermal unit (mmBtu).

This was the price suggested by a high-powered ministerial group and agreed by the government.

The state-run NTPC is also fighting a legal battle with Reliance Industries for the supply of natural gas but at a lower price of $2.34 per mmBtu.

The government is an intervener in both the cases and has asked the court to lift the ban on the sale of natural gas from the basin in the larger interest of energy-starved country.

The sale of KG-D6 gas would help eliminate power deficit in Andhra Pradesh, Maharastra and Gujarat. It would also reduce fertiliser subsidy as KG-D6 gas would be priced at $ 4.20 per million British thermal unit, half the price of alternate feedstock like naphtha.

However, Reliance may not be able to sell the gas as the Mumbai High Court has restrained the company from selling the fuel to any company other than Anil Ambani-led Reliance Natural Resources Ltd and state-run NTPC Ltd.

Promoters increase stake in Reliance Industries

Reliance Industries' promoters have increased their stake in the country's largest private sector company to over 49 per cent as of the December quarter this financial year.

The promoters purchased 12 crore shares, amounting to over a 4-per cent stake in the company, during the period between September and December 2008.

For the quarter ended 31 December, the promoters of RIL hold 771,698,164 shares amounting to a 49.03-per cent stake in the company, while in the September quarter they had 651,258,164 shares, a 44.80-per cent stake.