ADAG group chairman Anil Ambani and Reliance Industries executive director P MS Prasad on Monday called on petroleum minister Murli Deora in separate meetings apparently to discuss the gas supply agreement that the Supreme Court has asked both the groups to negotiate.
The groups have time till July 2 to start negotiations and have maximum time till August 12 to conclude the supply deal. Sources said that a gas supply agreement between the group companies can be possible only after the policy frame work for gas allocation to new power plants is put in place. That may take time as the power ministry has to firm up its views on the subject and discuss it with the petroleum ministry and seek consent from other departments dealing with law and fertilisers.
This appears unlikely to happen before the SC deadline to the groups to conclude the deal. ?Gas supply negotiations between companies have nothing to do with the proposed gas allocation policy for new power plants,? said a government official. Besides, the government cannot be seen to be giving priority to the ADAG group?s power plant over the proposed new power plants from other power producers needing gas.
Neither Anil Ambani nor Prasad spoke to reporters about their discussions with the minister. Petroleum minister Murli Deora told reporters, ?I have known (Anil) for many years. He just came to see me. I have nothing more to say.? Petroleum secretary S Sundareshan, who was also present at the meeting, too, declined to comment.
RIL chairman Mukesh Ambani had indicated to shareholders at the group?s June 18 annual general meeting that the proposed supply deal would be on an arms length basis. ?As and when the power plants of ADAG group are ready to receive gas, we would commence supplies to them subject to government granting allocations to these plants in the same manner as we do to all other plants to whom government has allocated gas from KG-D6.?
The negotiations will now depend on the evolving government policy on gas allocation. The apex court had on May 7 said that deals between gas producers and customers have to be as per government policies. ADAG group?s chances of getting gas cheaper than the $4.2 per unit approved by the government were blocked when the court turned down a previous order of the Bombay HC that allowed sales as per a family agreement.