COURT ALLOWS RELIANCE INDUSTRIES TO SELL NATURAL GAS FROM ITS FIELD IN THE KRISHNA GODAVARI BASIN TILL FINAL VERDICT

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THE Bombay High Court has allowed Reliance Industries (RIL) to begin selling natural gas from its field in the Krishna Godavari basin to consumers at $4.2 per unit, a ruling that partially resolves the legal logjam that threatened to stall the flow of natural gas from India’s most significant domestic find in the past 28 years to fuel-starved factories and power plants. This is an interim order, which will be valid for about 45 days till mid-March when the Bombay High Court will make its final pronouncement.

The high court had earlier stayed sale of gas by RIL following a petition by Reliance Natural Resources Ltd (RNRL) objecting to any gas sale before supplying the latter with its committed volume of gas. The output from the RIL gas field is slated to double India’s current gas production of around 80 million standard cubic metres per day (mmscmd) over the next four years.

“The order could be in operation till the judgement is passed. The order in no manner will affect the suit between RIL-NTPC and RIL-RNRL,” said Justice JN Patel of the division bench while passing the order. The order was passed following an appeal by the Union government, which had intervened in the case, asking for the stay on the sale of gas to be vacated.

The final order, which would be awaited keenly by both the sides—RIL and RNRL—will determine the future legal road for the case. RNRL will hope for a court order that would ensure gas supplies to its Dadri power project as and when it comes up. The empowered group of ministers had recently decided that RIL would supply gas to Dadri subject to availability. The legal counsel of both the sides agreed that the losing party would approach the Supreme Court after the final order, whoever wins. “The chances of the RIL-RNRL case going to the Supreme Court are 11 out of 10,” RIL counsel Harish Salve said.

The order also states that RIL will sell the gas in the interim period according to the gas utilisation policy finalised by the Union government.

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