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Our Bureau

Mumbai, Aug. 10

The Union Government’s approval is not needed while executing a gas sale agreement between Reliance Industries Ltd (RIL) and Reliance Natural Resources Ltd (RNRL).

The production sharing contract (PSC) between RIL and the Union Government does not have a bearing on this agreement between two companies, argued Mr Mukul Rohatgi, counsel for RNRL on Friday at the Bombay High Court.

Mr Rohatgi is representing RNRL, which is led by Anil Ambani group against RIL of Mukesh Ambani group over the dispute for the KG basin gas. Mr Rohatgi, refuting the earlier arguments raised by RIL counsel, said that the PSC gives full freedom to the gas field operator (RIL) to sell the gas to any company the operator chooses.

RIL wants to go back on the gas sale agreement, as gas prices are rapidly rising, he said.

RIL counsel had argued that PSC has an influence on later agreements, as the Union Government is the final owner of the gas produced from the field.

Mr Rohatgi also pointed that the valuation clause in the PSC cannot be linked with the existing gas sale and purchase agreement between the two companies.

He said that Reliance has entered into an agreement with NTPC to sell gas and also decided to use the gas for its own captive consumption in the future.

For these two decisions it had not sought the Government approval, he said.

More Stories on : Courts/Legal Issues | Petroleum | Corporate Disputes | Reliance Industries Ltd

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