Anil Ambani Group firm RNRL’s new gas supply agreement with Reliance Industries is valid only till March 31, 2022 and even in this, there is no mention of volume or the tenure of gas supply.
While the gas would be given by Mukesh Ambani-led RIL to the Anil Ambani group firm at the government specified price, the duration of the gas supply will be decided in the Gas Sales and Purchase Agreement as and when the two sides sign it.
The fuel supply, under such an agreement, could stretch beyond 2022 — depending on availability and allocation by the government. 2022 is the year when the revised non-compete agreement between the two Ambani brothers that bars Mukesh from taking up gas-fired power projects ends.
Reliance Natural Resources Ltd and RIL on June 25 signed a new Gas Sales Master Agreement (GSMA), which replaced a similar contract of January 2006, outlining the Mukesh-run firm’s intent of supplying gas to ADAG power plants on terms set by the government, industry sources said.
The GSMA does not mention volumes that RIL will supply to the ADAG firm .
The new supply agreement was entered into after the apex court had rejected RNRL’s case for gas at rates lower than government approved price.
Sources said the price of gas in the GSMA is stated to be according to the pricing formula that the government had approved in 2007.
According to this formula, RIL is selling gas from its eastern offshore KG-D6 fields at $4.2 per million British thermal unit at $60 dollars per barrel till March 2014. The rates may change in 2014 if the crude benchmark is changed in line with the international oil trends. — PTI