No buyers for RIL’s ‘over-priced’ gas, exults RNRL

Anil Ambani group firm Reliance Natural Resources Ltd has said that a letter written by Reliance Industries Ltd to the petroleum ministry offers conclusive evidence that there are no takers for its Krishna-Godavari gas at the prices demanded by RIL.

In a letter to addressed to petroleum secretary R S Pandey on Saturday, RIL had said that of the customers identified by the government to receive the initial 40 million standard cubic metres per day of gas from the KG-D6 fields, the National Thermal Power Corporation, Dabhol, Essar and Gas Authority of India Ltd are yet to draw a single unit.

The letter written by P M S Prasad, RIL executive director and head of oil and gas business, was essentially to deny RNRL's earlier accusation that RIL was hoarding gas from the field. It said that the company has not denied natural gas to any government-identified customer, but some customers have failed to pick up their quota.

Anil Ambani's firm has quickly picked up that detail to again bash brother Mukesh's RIL.

The letter said NTPC is yet to sign a contract; Dabhol has signed a deal for the gas allocated but has not yet begun drawing; while Essar and GAIL are expected to start drawing by next month.

Refuting charges by RNRL that RIL was ''hoarding'' gas and creating ''artificial scarcity'', Prasad's letter said, ''Of the allocated quantity of 40 mmscmd, allocation to the extent of 9.4 mmscmd remains un-operational till date. No customer who has been allocated gas by government has been denied gas for reasons attributable to RIL.''

An RNRL spokesperson said, ''RIL's letter conclusively demonstrates that customers are not willing to buy gas at these high prices.''
The two brothers are locked in a price dispute that has gone all the way to the Supreme Court.

While RNRL is insisting on the price contractually agreed between them when they parted company in 2005 – which is much lower than the government-mandated price – RIL, more or less backed by the government, says that agreement is no longer valid.