RIL to move SC against gas order

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: Reliance Industries (RIL) has decided to move the Supreme Court to challenge the Bombay High Court’s June-15 order asking it to supply 28 mmscmd of K-G D6 gas to Reliance Natural Resources (RNRL) at $2.34 per mmbtu for 17 years.

RIL is likely to file its petition on or before July 6. RNRL had on June 19 had filed a caveat before the apex court to guard against any ex-parte hearing on the matter.

RIL, in its communication to RNRL, sent on Wednesday evening, said, “We have been advised to and are filling appropriate proceedings in the Supreme Court against the judgment delivered by the Bombay High Court on 15th June 2009. We do not concur with your interpretation of the findings in the said judgment and the order dated 15th June 2009 and the question of deliberately, want only or otherwise defying the implementation of the order of the Hon’ble Court does not arise.”

RNRL had been aggressively pushing for a dialogue with RIL to arrive at a fresh agreement with RIL on the K-G D6 gas price, quantity and time. RNRL had sent in three communications, but RIL stuck to its stand that it was studying the high court order and will decide on gas supply at the price directed by the high court after seeking the government’s approval.

Reliance Natural Resources, in its fourth letter to RIL, argued that RIL should supply gas to RNRL at $2.34 per mmBtu. The price at which RIL makes supply to RNRL is not required to be approved or fixed by the government. The government’s approval is for the purpose of valuation of gas to determine the government share only. The high court held that the agreement signed on January 12, 2006 was not a suitable arrangement, and without gas supply RNRL would be a shell company.

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