New Delhi, May 5 (UNI) The Petroleum and Natural Gas Ministry today termed as ''totally incorrect and speculative'' a report saying the Ministry has opposed the sale of natural gas by Reliance Industries Ltd (RIL) to Reliance Natural Resources Ltd (RNRL).
In a statement, the Ministry said it has received a proposal from RIL seeking government approval on gas price pursuant to the Production Sharing Contracts (PSCs).
''The proposal is under evaluation with the Government in accordance with the provisions stipulated in the PSC,'' it added.
The statement said that the attention of the Ministry of Petroleum and Natural Gas has been drawn to the reports appearing in a section of the media stating that the Ministry has opposed sale of natural gas by RIL to RNRL at 2.34 dollars per Million British Thermal Unit (MMBTU) from the block KG-DWN-98/3 in Krishna Godavari deepwaters.
The Ministry has clarified that evaluation of the said agreement between RIL and RNRL is yet to be completed and no such note has been prepared in the Ministry on the issue as alleged in the media reports.
''Therefore, the reports appearing in this regard are totally incorrect, baseless, speculative and false,'' the official statement said.
Article 21.6.1 of the PSC stipulates that the contractor shall endeavor to sell all natural gas produced and saved from the contract area at arms-length prices to the benefits of the parties to the contract.
Further, PSC provides valuation of natural gas on the basis of competitive arms-length sales in the region for similar sales under similar conditions.
Article 21.6.3 of the PSC provides that the formula or basis on which the prices shall be determined shall be approved by the Government prior to the sale of Natural Gas to the consumers.
UNI RT PV1849