Anil Ambani's gas puts RIL in a fix

New Delhi, May 9 (UNI) With the Bombay High Court passing an ad-interim relief to Anil Ambani-owned Reliance Natural Resource Ltd (RNRL), Reliance Industries Ltd (RIL) finds itself with a surplus 40 MMSCMD of gas which it cannot sell.

Mukesh Ambani's RIL had contracted to sell gas to RNRL, run by ADAG, when the Reliance Group was split between the two brothers in 2005.

According to RIL, the order would force the company to produce only half of the 80 million metric standard cubic meters per day (MMSCMD) of the planned production from July 2008 in absence of an infrastructure to take the fuel to power plants owned by the Anil Ambani Group.

''In such a scenario the additional output of gas either goes waste or the second option is to flare-up the gas. When the country needs power this is a retrograde step and completely contrary to public interest,'' a top RIL source told UNI.

Any decision to this effect will only be taken in June after the summer vacation of the court.

Earlier on May 3, the High Court had to decide if the Gas Sale Master Agreement (GSMA) between the two parties fell under the scope of Section 392 of the Companies Act of 1956.

The court in its order observed although the GSMA not being an integral part of the demerger scheme, the fundamental issue that there is no suitable agreement entered into between the new management of RNRL and RIL, led the court to entertain the plea for an interim order.

According to RNRL, the agreement has been entered into by the erstwhile management of the applicant company (the alter ago of the demerged company) and not the new management under the leadership of Anil Ambani.

The court was of the opinion that the demerged company could not take decisions on the policy matters till the new management ratified such agreements.

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