Reliance set to sign gas deal with fertiliser companies

10 March 2009

Reliance Industries is reported to have resolved almost all issues with fertiliser firms and is set to start natural gas supplies from the company's KG-D6 fields in the east coast of India once the agreements with the respective companies are signed.

Ffertiliser firms are first in line to receive natural gas supplies from the Mukesh Ambani-run KG-D6 fields as per the government's priority list.

The Fertiliser Association of India had sent a letter to the government seeking clarifications on the 'take or pay' clause the gas sales-purchase agreement (GSPA) with Reliance Industries Ltd.

Twelve fertiliser companies have received GSPAs from RIL, apart from Ratnagiri Gas and Power.

The standard agreement says that if a client who offers to buy and doesn't offtake the gas will still have to pay.

The fertiliser units will have to pay for a minimum 90 per cent of the volumes allocated to them in a year even though they may not draw even one per cent of the gas supply.