Millennium Post

RIL gets restless, asks OilMin to declare new gas price on 13 May

While a new formula for pricing of all domestically produced natural gas was notified on 10 January and published in Gazettee on 17 January, the Election Commission last month asked the government to defer its implementation till general elections are completed.

The new pricing formula, that almost doubles the price of natural gas to about $8.34 per million British thermal unit, was to be implemented from 1 April but following the directive of the poll watchdog, was put in abeyance till model code of conduct for elections is in place. ‘... the new price as per the guidelines (approved by the Cabinet twice last year) must immediately be intimated once the model code of conduct is not in force i.e. on 13 May, 2014 which is after the last day of polling on 12 May, 2014,’ RIL President & COO B Ganguly wrote to the Oil Secretary. RIL said the $4.205 per mmBtu price for gas from its eastern offshore KG-D6 field was valid for the first five years of production, which ended on 31 March. But since the poll watchdog deferred implementation of the new pricing, the company continues to sell gas at old rate on ‘provisional basis,’ Ganguly wrote on 3 April. He said immediate intimation of the new rate after poll code ends on 12 May was ‘necessary to avoid extended dispute and irreparable loss to all parties to the production sharing contract (PSC).’

‘Any other course of action would be in violation of the PSC,’ RIL said. RIL has asked fertiliser companies, its sole consumers, to provide payment guarantees at new rate. Fertiliser companies have, however, refused to do so saying no new rate has so far been intimated. ‘We are seeking adequate comfort in the gas aale purchase Agreements (through letter of credit or otherwise) to ensure that once the price is notified, we, on behalf of all the parties to the contract, are able to recover the revised price with effect from 1 April, 2014,’ the company said.

RIL said whenever the government notifies the gas price effective from 1 April, it would recover the differential price from its customers.

KG basin row: SC names ex-Oz judge to chair Arbitral Tribunal

New Delhi:
The Supreme Court on Tuesday appointed Michaw el Hudson McHugh, former judge of the High Court of Australia, as the third arbitrator to resolve the dispute between the Centre and Mukesh Ambani-led Reliance Industries Ltd (RIL) on KG basin.

Hudson McHugh, ex-judge of Australia's highest court was named as the Chairman of the Arbitral Tribunal as the apex court had on 2 April withdrawn the appointment of James Spigelman, ex-Chief Justice and LG of New South Wales, Australia. Spigelman's appointment was withdrawn after the Centre drew the attention of Justice S S Nijjar that his name was mentioned in the list of names proposed by the Reliance group for appointment as an independent arbitrator.

Justice Nijjar had on 31 March passed an order on the issue of appointment of independent arbitrator as the Chairman of the Arbitral Tribunal whose two other members are former Chief Justices of India — S P Bharucha and V N Khare. While Mukesh Ambani-led RIL has nominated former Justice Bharucha as its arbitrator, the Centre chose Justice Khare as its nominee.

The Supreme Court decided to appoint an international arbitrator as the Chairman for adjudication of dispute between Reliance Industries Ltd and the government over recovery of cost for developing the country's key natural gas field in KG basin.
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