Court lifts ban on sale of Reliance gas till final judgement

The Bombay High Court Friday lifted its interim ban on the sale of natural gas by Reliance Industries from the Krishna-Godavari basin till final orders March 15, and said the company can retail it at $4.20 per unit.The Mukesh Ambani-led group can sell the gas from the fields off the Andhra Pradesh coast based on the criteria set by an empowered group of ministers, headed by External Affairs Minister Pranab Mukherjee, and accepted by the government, the court ruled. “This is only an interim order. The court has allowed Reliance Industries to sell gas at the rate determined by the government,” said Mohan Parasaran, the additional solicitor general of India, after the court’s verdict. A division bench of the Bombay High Court comprising Justices J.N. Patel and K.K. Tated has been hearing the case. Mukul Rohatgi, the counsel for Anil Ambani’s Reliance Natural Resources, which has been fighting a bitter battle as a claimant for a large portion of the gas find and at much lower prices, also emphasised that Friday’s order was only interim in nature. “Obviously, if gas comes out it has to be sold to someone. Reliance Industries has been allowed to sell gas only till the final order,” he said, adding: “If the court holds that we have the rights in the final orders, previous orders and arrangements will be modified.” The legal representatives said the court gave an interim order in the larger interests of the country and to ensure that production from one of the largest hydrocarbon fields in India does not get delayed any further. They said Reliance Industries can also sell its gas to state-run utilities like NTPC - which is also fighting a legal battle with the Mukesh Ambani-led company for procuring gas at $2.34 per unit and not $4.20 as fixed by the government. The court had stayed the sale of natural gas from the fields after two cases were filed against Reliance Industries over the sale price and quantity of fuel - one by the Anil Ambani Group and the other by NTPC. The ministerial group had decided early January that Reliance Industries can get gas from the Krishna Godavari basin only after the needs of fertiliser units and power plants were met. The group noted that the production of gas will reach a “plateau” of around 80 million metric standard cubic metre per day (mmscmd) in 2012, before it starts dwindling from 2017. It, accordingly, decided that demands from petrochemical facilities, refineries, steel plants and downstream units of Reliance Industries will be met only after production from the field increases to 50 mmscmd.

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