New Delhi, Oct 29 (Inditop.com) The Supreme Court Thursday observed that the country will stand to gain if natural gas from the Krishna-Godavari basin is sold at a lower price, while Reliance Industries alone will benefit if the consideration is higher.
“If the price is less, the country gains. If it’s more only you gain,” observed a three-member bench of Chief Justice K.G. Balakrishnan, Justice R.V. Raveendran and Justice P. Sathasivam, while hearing the dispute over Krishna-Godavari gas for the sixth day.
The remark came when Harish Salve, counsel for Mukesh Ambani-led Reliance Industries, was explaining the finer points of the company’s gas pact with the oil ministry and the government’s policy for utilising the hydrocarbon among various industries.
The bench also asked if gas from the Krishna-Godavari basin could be reserved for Anil Ambani-led Reliance Natural Resources and the state-run energy utility NTPC, both of which are locked in a legal battle with Reliance Industries.
Salve said this was not possible technically, adding it was also not viable economically to supply gas to Reliance Natural Resources at $2.34 per unit — the price that was also quoted by the company in a tender floated by NTPC.
“Suppose there was no dispute between the brothers and the brothers were as the brothers should be, it would still not have been possible for Reliance Industries to supply gas,” said Salve, referring to Anil and Mukesh Ambani.
The Supreme Court has been hearing dispute over the supply of natural gas from the Krishna-Godavari basin awarded for exploration and harnessing to Reliance Industries before a split in 2005 in the group founded by Dhirubhai Ambani.
Based on a family reorganisation pact, the Anil Ambani Group wants 28 million units of gas per day for 17 years at $2.34 per unit. But Mukesh Ambani’s firm says it can only sell it at $4.20 per unit, claiming this was the price fixed by the government.
The Reliance Industries counsel told the bench that gas from the basin, now under production, may not last for long enough to supply for 17 years to the Dadri power plant of the Anil Ambani group, as it was yet to be commissioned.
He said as per the gas supply master pact with the government and the policy on gas utilisation, it was also not possible to supply gas to any firm for purposes other than the power generation or fertiliser production.
Salve said even if the Anil Ambani group starts work on the Dadri power plant in all earnest, it would take at least three years for it to be become operational and for supplies to assume.
Further, even if the plant becomes operational by 2013, supplies from the Krishna-Godavari basin can last only for six years till 2019 — the time till the reservoir is estimated to last.
