Reliance to auction KG basin gas for price discovery

Mumbai: Reliance Industries (RIL) has decided to initiate the process of selling the gas found in the Krishna Godavari basin through an auction over the next few months. This is as commercial production of gas from the Krishna Godavari basin has to start in a year''s time.

RIL is likely to invite bids for the gas sale, which accounts for around 50 per cent of the country''s current domestic production, after it receives the green signal from the government to proceed with the auction.

Earlier this month RIL said that it would be able to complete the process by June, after which the gas sale agreements would be signed with various customers.

However, the Reliance-Anil Dhirubhai Ambani Group (ADAG) may end up spoiling the party, citing a possible violation of the gas sharing agreement between the two brothers.

Sources close to ADAG see the auction as an attempt to deny them their share of the gas.

Currently, RIL is fighting a court case with NTPC on the price of gas. If RIL wins, it could end up extracting a higher price from both NTPC and RNRL. However, RNRL insists that it should continue to get the gas at the lower price.