The Hindu Business Line : Pipeline project: Anil Ambani asked to indicate gas source

Plans of Mr Anil Ambani promoted Reliance Fuel Resources Ltd to lay a Rs 16,000-crore natural gas pipeline to bring gas from KG Basin to its proposed power plant at Dadri in Uttar Pradesh are facing a few hurdles. The company has been asked by the Petroleum Ministry to first confirm the source of gas supply, before it is given a go-ahead for the pipeline project.

Consequently, the proposal for laying the gas pipeline seems to be largely dependent on the arrangement between Reliance Industries Ltd (RIL), led by Mr Mukesh Ambani and Reliance Natural Resources Ltd (RNRL), led by Mr Anil Ambani, for sale and purchase of gas. Reliance Fuel Resources has in its application to the Petroleum Ministry shown RIL fields off the Andhra coast as the source of gas supply for the pipeline network. The Petroleum Ministry directive will, therefore, necessitate an early resolution to the issue of pricing of natural gas under the gas supply agreement between RIL and RNRL.

`Submitted gas source info'

When contacted , Reliance Fuel Resources officials told Business Line : "We have submitted to the Ministry information on both the source of gas supply and users." Also, RNRL has argued that there have been instances where permission has been given to private players to get into the gas pipeline business without indicating the source or user of gas.

RIL is to supply 28 million cubic metres a day of gas to RNRL at $ 2.34 per million British thermal unit (mBtu), the valuation formula of which has not been accepted by the Petroleum Ministry. The price is half of the current market price.

Reliance Fuel Resources had approached the Ministry with a proposal to lay a pipeline through Kakinada (Andhra Pradesh) to Dadri, where Reliance Energy Ltd plans to set up a 5,600 MW power project. It has also proposed to set up city gas distribution networks in cities falling along the pipeline for supplying natural gas to industrial, commercial, domestic and automobile sectors. The company proposes to complete the project in two years once it gets all the necessary clearances.

More Stories on : Petroleum | Reliance Industries Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page