RIL refuses to follow govt order to swap KG-D6 gas
8 Oct 2012 11:49 PM GMT
Reliance Industries has refused to follow oil ministry order to swap its KG-D6 gas with a Andhra city gas firm saying 'trading' in scarce natural resource was not permissible under gas utilisation policy.
The ministry had ordered that a part of 2.594 million standard cubic meters per day of KG-D6 gas allocated to state-owned GAIL India Ltd's be diverted to Hyderabad-based Bhagaynagar Gas Ltd [BGL] under a so-called gas swapping guidelines. GAIL was to make good the shortfall through imports of liquefied natural gas [LNG] which costs four-times the KG-D6 gas price of USD 4.2 per million British thermal unit. GAIL was to charge BGL the actual price of imported LNG.
RIL in a letter to the ministry said if such an 'untenable' policy was allowed it would encourage KG-D6 allottees to sell the cheap gas at higher rates during times like plant shutdowns when they don't need the fuel.
'KG-D6 gas has been allocated by government under gas use policy approved by EGoM specifying, sector priority, plant location and use, whereas to implement the said guidelines, RIL is expected to accept change in sector, location and use from currently allocated end use of KG-D6 gas, and not at the instance of the government but at the behest of the customer apparently without any reference to or intervention of the government,' RIL wrote. The ministry had on 21 September written to RIL saying a gas swap 'parties do not have to approach government for approval.'
'The swapping guidelines are untenable and cannot be reconciled with existing Gas Use Policy,' RIL wrote.
Based on EGoM decisions, customer wise allocations with specific end use and that too at a specified location was made.
‘If implemented, these [swapping] guidelines would render any meaningful monitoring of the end use impossible either by the government or by RIL and result in... trading of gas allocated,’ RIL wrote.  Â
RIL GETS USD 1.5 MN FROM BOND SALE
Reliance Industries [RIL] has mopped up USD 1.5 billion through an overseas bond sale progamme, sources said. With the latest debt raising, the Mukesh Ambani-led oil, gas, petrochemicals and retail giant has raised USD 4 billion so far this year, with the first two being a USD 1.5-billion issue in February and another USD 1 billion issue in May.
Of the USD 2.5 billion raised by RIL [which still is one of the least leveraged large corporates in India with less than 0.50 per cent debt-equity ratio] earlier, the proceeds from first issue of USD 1.5 billion were mopped up by its US subsidiary for its shale gas programme, while the other was meant for its Jamnagar complex expansion.
The ministry had ordered that a part of 2.594 million standard cubic meters per day of KG-D6 gas allocated to state-owned GAIL India Ltd's be diverted to Hyderabad-based Bhagaynagar Gas Ltd [BGL] under a so-called gas swapping guidelines. GAIL was to make good the shortfall through imports of liquefied natural gas [LNG] which costs four-times the KG-D6 gas price of USD 4.2 per million British thermal unit. GAIL was to charge BGL the actual price of imported LNG.
RIL in a letter to the ministry said if such an 'untenable' policy was allowed it would encourage KG-D6 allottees to sell the cheap gas at higher rates during times like plant shutdowns when they don't need the fuel.
'KG-D6 gas has been allocated by government under gas use policy approved by EGoM specifying, sector priority, plant location and use, whereas to implement the said guidelines, RIL is expected to accept change in sector, location and use from currently allocated end use of KG-D6 gas, and not at the instance of the government but at the behest of the customer apparently without any reference to or intervention of the government,' RIL wrote. The ministry had on 21 September written to RIL saying a gas swap 'parties do not have to approach government for approval.'
'The swapping guidelines are untenable and cannot be reconciled with existing Gas Use Policy,' RIL wrote.
Based on EGoM decisions, customer wise allocations with specific end use and that too at a specified location was made.
‘If implemented, these [swapping] guidelines would render any meaningful monitoring of the end use impossible either by the government or by RIL and result in... trading of gas allocated,’ RIL wrote.  Â
RIL GETS USD 1.5 MN FROM BOND SALE
Reliance Industries [RIL] has mopped up USD 1.5 billion through an overseas bond sale progamme, sources said. With the latest debt raising, the Mukesh Ambani-led oil, gas, petrochemicals and retail giant has raised USD 4 billion so far this year, with the first two being a USD 1.5-billion issue in February and another USD 1 billion issue in May.
Of the USD 2.5 billion raised by RIL [which still is one of the least leveraged large corporates in India with less than 0.50 per cent debt-equity ratio] earlier, the proceeds from first issue of USD 1.5 billion were mopped up by its US subsidiary for its shale gas programme, while the other was meant for its Jamnagar complex expansion.
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