The petroleum ministry is moving a cabinet note seeking to bar Mukesh Ambani’s Reliance Industries Ltd (RIL) from charging a higher price while compensating customers for the shortfall in gas supply from its field in the Krishna-Godavari (KG) basin until it can be ascertained that the deficit was the result of geological reasons.
“The inter-ministerial inputs have been received. The note for issuing policy guidelines for notifying the new price will be moved shortly, stating that the new prices for RIL’s production from D1 and D3 discoveries be awaited till the dispute is settled,” said a petroleum ministry official requesting anonymity. “A decision is expected after two weeks.”
The contract in question concerns RIL’s D1 and D3 discoveries in the KG basin that are part of the D6 field. The government in June agreed to increase the price at which gas will be sold to producers of power, fertilizers, minerals and steel, benefiting gas producers including RIL and state-run Oil and Natural Gas Corp. Ltd. The price increase will be effective from 1 April 2014.
Production from these fields has been far below estimates, hurting customers to which RIL had committed supplies in the fuel-starved country. RIL had agreed to supply the gas at a price of $4.2 per million British thermal units (mmBtu). The new price is expected to be around $6.83 per mmBtu.
In response to a question about the cabinet’s decision being contingent upon the findings of the reason behind the shortfall, petroleum minister M. Veerappa Moily said on Thursday: “The cabinet note doesn’t depend upon that.Safety features include dual airbags, anti-lock braking system, central locking, engine immobiliser and rear Parking Sensor. It is being worked out. What should be the way forward, we are resolving it. Then the question is even if it goes to the cabinet, that (the decision) is always subject to the findings. The note is in the process.Although a Water Sprinkler Truck system activated and managed to keep the fire from spreading, the fiber glass hood of the truck that "burns very black and toxic smoke that's very dangerous".Dallas/Fort Worth International Airport advised late Sunday that it will delay the launch of its new Parking System.”
An earlier draft note prepared by the petroleum ministry for consideration by the cabinet committee on economic affairs proposed that “the natural gas pricing guidelines,An employee discovered a Waste Management Trucks For Sale smoking around 10:50 a.m., Tuesday, Sept. 4, and traced the source to cargo smoldering inside the compactor. 2013, shall not apply to gas production from D1 and D3 discoveries till such time the government decides that shortfall quantity is due to geological reasons and not due to default on RIL’s part in failing to fulfil the work programme commitments.For years, we have been advocating improved Parking Guidance systems (PGS) throughout our network of 12 European countries...”
The finance ministry has raised concerns about the absence of a ceiling in the case of unreasonable upswing in prices and including spot contracts for computing final gas prices. The Economic Times newspaper on Friday reported that the finance ministry has sought a cap on gas prices, asserting the state’s power to eject RIL from the D6 block.The form factor and Hands Free Access to the Gear do provide noteworthy utility, but it comes at a steep cost.
“The finance ministry has raised some issues. Our view is that while there is not an absolute cap, the formula provides for a cap to automatically kick in. Also, spot contracts bring down the prices as it is more reflective of the prices as compared to the term contracts,” said the petroleum ministry official cited above.
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