Should Govt Pay Reliance $14.2/mmBTU For K-G Gas?

2000m3 storage tankPolitics apart, $14.2 — that is the value RIL is asking the government to pay for per Million Metric British Thermal Unit of gas from the K-G basin. (One cubic foot of natural gas produces approximately 1,000 BTUs, so 1,000 cu ft of gas is comparable to 1 MBTU. MBTU is occasionally expressed as MMBTU, which is intended to represent a thousand thousand BTUs).

The problem is under discussion in the federal government. The press conference was well-timed and is likely to strategically help a piece in the government who does not need to succumb to the pressure from Reliance.

Reliance has the contract — signed in 2000 — to extract oil from K-G basin.

Under the revised agreement of 2009 with the government, Reliance is presupposed to sell gas at $4.2 per mmBTU up to March 31, 2014. Much before 2014, now, RIL has been demanding that the value be increased to $14.2 per mmBTU.

Tapan Sen, who was a member of the standing committee on petroleum and natural gas, has been demanding since 2010 that urgent investigation be held into the “nexus” between the Manmohan Singh government and Mukesh Ambani’s Reliance Industries on K-G basin .

His voice didn’t reach millions despite his brilliant follow up of the methanol extraction tower problem. But Kejriwal has just managed that.

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