RIL have reported they are ready to sell gas to RNRL at the same terms present in its draft contract with NTPC
Reliance Industries’ senior counsel Harish Salve said on Monday that his client (RIL) was ready to sell gas to Reliance Natural Resources (RN RL) at the same terms present in its draft contract with NTPC.
Salve said while presenting his arguments in the long-pending legal battle between RIL and RNRL that, “RIL’s draft contract with NTPC has the price of $2.34 per million metric British thermal unit (mmBtu) for a 17-year period, subject to government approval.
NTPC contract recognizes the importance of government approval while RNRL is not willing to accept government approval clause in the RIL-RNRL gas sales purchase agreement (GSPA).”
“Our contract with RNRL is that RNRL will be offered gas at no terms and conditions unfavourable than RIL-NTPC deal. NTPC contract has the government approval clause so they (RNRL) should honour that clause. Our (RIL) dispute with NTPC is not over pricing,” Mr Salve argued.
The price of $4.2 per mmBtu for natural gas sold by RIL has been approved by the government. However, this price approval is without any prejudice to the RNRL and NTPC legal cases. Interestingly, NTPC has approached the government for buying gas from RIL at price of $2.34 per mmBtu but this has yet not been approved by the government. RNRL counsel had earlier argued that government approval was only required for valuation purpose only.
Mr Salve also accused RNRL of not having a single letter from the bankers saying that they are not willing to lend money to RNRL for setting up power plant due to lack of firm commitment of gas from RIL. RNRL’s counsel had earlier argued that bankers are not willing to lend money due to lack of a firm gas supply arrangement with RIL.
NTPC is fighting a separate legal battle with RIL over its gas sales agreement. The court will resume hearing on Tuesday.