Mumbai, May 4: Reliance National Resources Limited (RNRL) today said that the gas supply agreement between the Reliance Industries Limited (RIL) and the company is an integral part of the scheme of reorganisation of the Reliance group and the pricing of gas is the same as the price for gas supply by RIL to the state-owned firm NTPC.
Commenting on reports in a section of the media, an official spokesperson for Anil Ambani controlled RNRL said that the supply of gas at USD 3.18 per million british thermal units (MBTU) was the part of the Reliance group separation deeds and was approved by over two million Reliance shareholders and the Bombay High Court.
The company was responding to the report that said that the supply of gas as promised by RIL to RNRL from Krishna Godavari gas basin was very low to the prevailing market rates and this might cause of revenue loss of Rs 25,000 crore to the government exchequer in next 15 years.
The gas supply under the agreement will generate power of over 8,000 MW, mitigating severe power shortages, and fulfilling critical national priorities.
The arrangement between RIL and RNRL for sale and purchase of gas was made at the same time as the award of the gas supply contract by the government owned company NTPC to RIL.
While the price of gas under the gas supply agreement between RIL and RNRL is the same like RIL had with NTPC but much lower than that the RIL had with GAIL from Panna-Mukta/TAPTI fields at USD 5.57 per mbtu.
The spokeperson said, while the gas price was discovered through a process of international competitive bidding, the price reflects an arrangement for firm take-or-pay gas contract for a period of over 17 years, which cannot be compared with spot prices or shorter term contract prices.
The gas supply agreement protects and enhances the interests of over 2 million Reliance shareholders, who have become shareholders of RNRL, pursuant to the said reorganization, he said.