RIL, RNRL expected to arrive at gas supply pact in early June
27 May 2010
Former corporate combatants Reliance Industries and Reliance Natural Resources Ltd, led by Mukesh Ambani and his younger brither Anil Ambani respectively, are expected to arrive at a gas supply settlement in the coming fortnight.
The agreement, being viewed by commentators as a first step to a likely patch up between the warring brothers, is currently under negotiations between the two companies (See: Ambanis finally agree to dump old pact, start afresh).
After five years of internecine feuding, the brothers unexpectedly announced a truce on Sunday by saying that they ahd agreed to end the non-compete clause from the agreement announced when they split the group companies among themselves, which had been a source of friction among them.
The disputs led to a number of court cases aginst each other in the Mumbai High Court and the Supreme Court. With the government throwing its weight behind RIL, earlier this month RNRL lost case in the Supreme Court over the pricing of the gas to be supplied by RIL to RNRL for the Dadri power project. (See: SC rules in favour of RIL in gas dispute)
The Supreme Court also asked the two companies to renegotiate a private natural gas supply contract within six weeks and gave the government control over setting gas prices.
The new deal being negotiated would revolve around Mukesh Ambani's RIL's supply of gas for the next 10 years from 2012 to power plants run by younger brother Anil Ambani, say media reports.
According to a report in The Economic Times today, RIL may acquire a significant minority stake in the gas-based power plants owned by Anil Ambani's ADAG.