GAIL to cancel contracts for laying Tamil Nadu pipeline Decision to cancel TN portion of the project will depend on outcome at apex court RICHA MISHRA Court case. The project, which (India) has decided to can- was supposed to pass through seven districts of Tamil Nadu, a contracts worth t2lO crore for laying the 310-km Thmil Nadu distance of 310 km covering 134 villages, 505 km In Kerala and 85 GAIL cel stretch ofthe Kochi-Kottanad Mangalore-Bangalore gas pipeline. The State-rUn company has km In Karnataka, Cc, we ment and laying consider for been facing "While the matter is sub judi have approached the State 650 crore on contracts, spent which Included pipe procurethe pipes has trouble in Tamll Nadu on concerns of damaging farm land. Government once again to re- the restriction imposed this (Tamil Nadu) stretch. The total pipeline project cost was esti- on GAII. for laying the network, Ti-Ipathi told Business Line. mated at 3,200 crore. A decision to this effect was State support taken by ny the board of the compa- recently," said Chairman and tor, BC Ikipathi, Managing Direc- But' a decision on the company will final- GAIL whether ly abandon the Tamil Nadu portion of the project will depend on the outcomeof the Supreme Stuck In bttweenme dlscuptin willImpact Petronet !.NGs Koct% terminal torwhlch GAlicannotcompletethe gas exit route. plications of terminating the Following protests (by farmers), "It's only when we invite re- the Tamil Nadu Government has bids declared that GAIL would have we will know. Material procurement Is 70 per cent of the total to stop laying the pipeline across farm fields and instead align it with highways. Thpathi said it is difficult to give the Immediate financial tin for laying the network that project cost And we are preserving the material." This disruption Is not only impacting LNG's Koch! LNG terminal for which GAIL is unab!e to com- contractors. GAIL, but also Petronet plete the gas exit route. beginning, the State In the Government had extended sup- as no network can be laid without !ts help,, Thpath! said. port, With State support, been able to lay the tial stretch. GAIL has 60-70-km !ni- " Highioltage Action likely in Enerd Sector if Modi Beèomes' Next PM ¶-ac111,4, MITUL THAKKAR VAOOOARA The energy sector can brace for high voltage action if Narendra Mod! be comes PrlmeministerTheenergeticßJp leaderhasruledthe state thathas India's biggest refineries, highest gas consump- ( tion, two LNG terminals and volatile re_ latlons with public sector giants Gall In dia, ONGC and Coal India - making many inthese companies nervous. Oil Industry executives say Modi is fa 4 ' \ miliar with the nitty-gritty and the jargon of the sector, but his government in Gujarat has been at war with the Centre on many energy-related matters includlug a claim of an additional 9,000 crore of royalty from ONGC. Its power utility had complained against Coal India to the competition watchdog, which slapped a fine of ?1 773 crore on the monopoly With poll surveys pointing to a BJP victory officials in Gujarat are already relishing the prospects of the state's energy companiesunderMddi.Gujarat'senergy minister Saurabh Patel, a strongcriticof the UPA government In issues related to thestate, saidNewDellhihasbeenbiase.j "It is unfortunate that Centre and Its companies have not been treating our companies well. They have always been biased. lam confident that the relation ship between state and Centre ventures will not only improve but injustice will be corrected." " A senior Gujarat government, who did notwanttobe identified, wasmoreblunt. 'The days of unreasonable dominance of central PSUs are numbered now," he said. Mod! would like to change the out look of state firms towards Gujarat and some of its companies, he added. The state even came up with the Gujarat Gas Act to control gas transmission, supply and distributionbutthis was quashed by the Supreme Court, which said this wasa Central subject. This prompted the Cen tral government to form Petroleum and Natural Gas Regulatory Commission in 2007 through an Act to keep states legally out of such matters, Insiders in the state governmentarenot ruling out some of the bureaucrats shift ing to national capital with Modi. Guja rat's energy secretary DJ Pandlan, Guja rat State Petroleum Corporation (GSPC) MD Tapan Ray Atanu Chakraborty who is heading state's fertiisers and chem icals companies are some of them. Gujarat has many scores to settle with theCentre, Itclaims injustice Incoalallo cation and step-motherly treatment to wards the state in investment decisions bystatefirms suchas NTPC andNHPC, It also wonacourt case agThst the Centre's allocationof gasforcitynetworks, which in Gujarat to dependheavilyoncostjy LNG imports, had earlierforced consumers , unlike Mumbal and Delhi. Lastyear,GSPChadtogosoloforacqu. ingßG Group's controlling stake in coun try's largest private natural gas distribu N tion firm Guiarat Gas Co a ter QNC and IQQ quit the consortium abruptly In past v few months, Gujarat government's un dertaking also won regulatory and 0 court baffles against the Centre. Fbllowing a __ 'at / Ie / "7, I I "At . I> Supreme Court order this yea cadre. lie has held positions such as collector of Eharuch and Kheda. He has beenon deputation to the ministries offi- national cut supply of cheaper natural gas to its subsldiariesandjointventni-esandsh It with other gas distribution companies nance and company affairs and the department of economic affairs. He had a long stint as the managing director of inequalproportion, A senior executive of Gail had told ET that Modimay bethefirstprimeMjnister who not otilyunderstandsbusiness butal Gui arat State Petroleum Corp for nearly eight years before becoming the state's energy secretary sothedetailsof naturalgasbusiness such as difference between mmbtu and mmscmd, terms for units of natural gas TAPAN RAY - He replaced Pandian as the top executive of GSPC. His approach has been different. He preferred to stitch relationships basedontheheatcontentof dailyvolume, In late November, Gujarat High Court directed ONGC to pay close to 9,000 with central PSUs to strengthen GSPC's position against Gall. He led consortium of oil marketing companies bC, HPCL crore as royalty and penalty to the Guja rat government and it may have to shell out much more if it fails to get respite fromthe Supreme Court. and BPCL to successfully bid for three pipeline projects of 4,000 km against Gail. Man of, few words, Ray also got MOW'S ENERGY CZARS ONGC and lOC on board to bid for BG o - Group's controlling stake in its subsidiGujarat Gas Company Instead of lockinghorns with Gujarat government, JAGATNEESA PANOIYAN ary Pandiyan has led Gujarat's charge against the central government and pub licsctorgiants. Heisthenjanbehindthe Gail preferred not to compete with ag gressive GSPC to acquirelargestnatural gas distribution firm in private sector state's complaint against Coal India for abusing monopolistic power riled in the Competition Commission of india, andwithdrewfrom the race. Ray who holds a BTech degree in mechanical engineering and an LLB, belongs to West Bengal and is a 1982 batch which thestatewon. Hetook Gailheadon for expanding city gas-distribution net work in the state. He asked ONGC to pay royalty based on market price of crude, not the discountedrate atwhich It sells to LAS officer of the Gujarat cadre. He is the formercollector of Godhra and Vadodra. I-be has also been in the home department and served in Delhi in the power ministry and as a joint secretary in the minis try of defence production and supply refiners. He was also involved in the state's dcci sion to approach the Supreme Court, which directed ONGC to pay t9,000 crure royalty retrospectively to Gujarat. In an other case during Pandian's tenure, the same court asked Gail to allocate natural gas equally to all the distribution firms insteadof favouringitaventures in Delhi ATANU CHAICRABORTY Charkraborty deals with the energy sectorfromtheperspective of a key consumer. He has been waiting for his posting in Pandian is known for spearheadingstate'sfightagainstCnt Delhi for three years after his empanelment,Modlgovernmentthathasbeendelayingtransferof thisbureaucratknown in energy sector. Due to Pandian's ag gressive speeches, top brass of central PSUs such as Gail, ONGC, NPTC and Coal India often preferred to skip energy for running state venture efficiently also gave him additional charge of Gujarat Alkalies and Chemicals that is country's largest chlor-alkali maker, Earlier, spec- and Mumbai, sector's events in Guiarat. Later, Modi government promoted him as principal secretary energy Pandian, who is from Tamil Nadu, is a 1981 batch LAS officer of the Gujarat - ulations were rife that Chakraborty would replaced Ray whose transfer to Centre is also duefor longnow ", [email protected] - - RIL legal notice for authors of Gas Wars B SHUcHI BANSAL & UTPAL the BHASKAR Reliance Industries Ltd (JIlL) has served a legal notice on the authors of the book Gas Wars—Cro- ny Capitalism and the Ambanis for al- legedly defaming RIL and its chairman book? demanded that the copies in ment. The notice is being reviewed by our legal experts and an appropriate re- referred phlet, also sought an unconditional to the book as a pam- distributors "in the form and manner ment. acceptable to our clients". Manas Saikia, managing Failing compliance with the de- Paranjoy Guha Thakurta with Subir Deepshikha Shankar, the event manag- Ghosh and Jyotirmoy Chaudhuri, and er for essentially deals with suspected irregu- sionals, who had larities for the book release function. and/or crimi- mentioned in the notice, including the Foundation of Media Profes- forwarded the e-invite The government decided last year to double the price of gas sold by domes- tice. She tic producers with effect from 1 April people on her mailing list in her per- 2014—a move put on hold until after the completion of the general election sonal capacity and on my request,' said Thakurta, a journalist. Commission of India. The price in- crease would have benefited producers "It is very sad that she has got a no- only forwarded the mail to In a statement, Thalcurta said Gas had been "more than fair" to RIL and Ambani by quoting and providing Wars including RIL and state-run Oil and their version of events, circumstances Natural Gas Corp. Ltd. and controversies at The Supreme Court is hearing public interest litigations (PILS) on the price increase. Law firm Khaltan and Co. Up, acting on behalf of RIL, served notice on the authors and the book's distributor Feel Books Pvt. Ltd. and e-commerce weband Amazon that sold the sites Flipkart book for intimidation "great length and depth", including detailed interviews and harass- is being provided as per the leThakurta said in his state- gal process," nal proceedings against the people in May on the orders of the Election sponse public apology from the authors and mands, it threatened civil pricing of natural gas. is copies be destroyed. The law firm, which The 570-page book, which was released on 15 April, has been written by the Ambani like an act of Mukesh Ambani. in by RIL and Shri Mukesh U. circulation be recalled and all existing director their response shortly. "Four years of research has gone into this book. It was not written overnight. We have pubthe full Reliance story as well. I don't know how it could have been lished more balanced," said Saikia, adding he was for freedom of publishing, which is increasingly under threat in India. Mint journalist Tamal Bandyopadhyay's book Sahara: The Untold Story attracted a lawsuit from the Sahara group, which secured a court order in December barring its publication. In January, Bloomsbury Publishing India Pvt. Ltd withdrew a book it published, The Descent ofAir India, by former Air India Ltd executive Jitender Bhargava with senior RIL personnel such as B.K. Ganguly, president and chief operating because it said several controversial officer (business operations explora- tion minister. tions and production). a legal notice had been served. to things about Praful Patel's days as aviaThe legal notice served on An RIL spokesperson confirmed that According of Feel Books, said his lawyers were going through the papers and would prepare RIL said: made in Thakurta, the authors of behalf of "The remarks and allegations the said pamphlet are false and have been deliberately and reck- being party to a 'conspiracy" to defame RIL. A copy of the notice has the mental right to free expression en- our clients and to bring them into dis- been reviewed by Mint. shrined repute." It called for a halt to further sales of book were exercising their funda- in the Constitution of India. "The legal notice sent to the authors lessly made with an intent to defame shuchi.b@live,nint.com AAP takes up Essar Oil row with [C govtofviotatirig poll code by pushing Accuses UPA Cabinet note to hand over oil fields to the company BS REPORIER rFhe Aam Aadml Party (AAP) on Thursday shot off alettertothesleefion Commission accusing United Progressive th Alliance (tWA) government of violating the model code of conduct by pushing a Cabinet note to help Essar Oil get certain oil fields. H Despite the model code being in force, an oil field that "An oil field that was put out for In 1993, a Is sought on the eve of bidding was put out for bidding In 1993 process that has not been concluded till date, 21 yearsback, and has not been to be handed over to elections" concludedtill date, Is sought to be handed over to Essar on a platter on the eve of elections," AAP senior leader Prashant Rhushan wrote Election to Chief Commissioner VS Sampath. Bhushan had held a press conference on Wednesday and alleged that Petroleum Essar on a planer DDACIIMJT DUIICIJItM MP leader and senior lawyer Ptemier Oil in 1996, but the and contractwas never signed over several disputes, Including the against the media house. one over the net worth of Essar Wednesday. and the amount of cess and royalty to be paid. company was awarded tie asked for stringent action Essar Oil, in a statement on had said, "The Ratna R-series block in an Minister Veerappa Molly had pushed a revised Cabinet note, to open and transparent manner, allow the government to take treating the allocation of Ratna any such decision of signing through a bidding process. We are not aware of any internal and k-series oil fields to Essar the dontract, as not only that notes Oil as concluded, overniling would be a scam, but would be a major policy decision, a vio- various officials. According to the AAP, the reserves, valued 52,000 at crore, would The AAP urged EC not lation ofthe model code of conduct and a corrupt practice". or documents of t!e ministry in tl petroleum However, it is in the national interest to make any block operational, especially matter. increase in worth substantially after further exploration. The AAP also complained to EC about restrictions that the The oil fields, located 90 cant party faced duringits campaign in Varanasi. It also raised the country is importing over 79 per cent of its crude require, issue of the NDTV opinion poll ment at a high cost." south-west of Mumbai, were awarded to Essar 011 and km when there has been slgnidelay already and the Delhi has no gas for 'ts power plants Mohammad Mi __________________________________________________ ti: NEW DELHI: While the demand GAS for power is expected to go up around 6,200 MW this to peak iummer, non-availabil ity of natural gas is hamper ing production in plants of the Capital. Of the city's six power power are gas-fired, two have been shutdown due to plants, four lack of gas and the remaining two are functioning at only a fraction of their capacity. The biggest 1,500 of these, the MW Bawana power plant, able to produce only up to 320 MW when fully func tional, is in "shutdown" mode due to non-availability of gas. - [i] :1 VAt] SHORTAGE AFFECTING POWER PRODUCTION Bawana 1500 MW Rlthala 108 MW Non Damnaull 750 MW Construction not 250 functional atN£RATION 5,653 I 6,200 MW In 2013 j HIGHEST PEAK DEMAND SO FAR Delhi's i MW " " Delhi's actual production: MW 1,575 MW It has not been'playing the crucial role it was supposed to in meeting the city's power demand - Shortfall: '1000 MW(ipróX) which had touched a staggering 5,653 MW last summeg. Ô PEAK SEASON DEMAND EXPECTED IN 2014 Installed capacit: 3,052 _______ ______________ ________________ ____________ _______ _____ _______________ completed _ ___________________________________ _______________________________________ powIR ___ MW (presently in shutdown mode) ' _ __________ _______ _ ________________ ______________ " cause of which we cannot take power from this plant," said a discom official. "Our priority is tobuypow- er at cheap and reasonable rates. The problem with the Bawana plant is that till the t ime regular supply of sufficient gas needed to run it to its full strength is arranged, the plant will continue to be a liability for the department," said the official. However, if the Delhi Govc rnment is able to run the plant to its full capacity on a regular basis, the Bawana plant can emerge as a 'reliable' option for the Delhi dis- corns, said the official. Like the plant at Bawana, even the Tata Power-owned 108 MW plant in Rithala has become non-functional, due to non-availability of gas. According to Delhi Tranofficials. the proposed Delhi Government's coming a reliable option for cheap and affordable source to arrange a reliable source of fuel' supply to the of power generation, the Ba wana plant has become more plant ofa "liability" due to its errat ie functioning and high cost rates, ofpowergeneration, makestheplantirregulanmd work has been done but the an unreliable option for us and in turn also raises the cost of power generaticin be construction of The failure also question poses on its a serious ability to make power cheaper and af fordable. discom officials told The Hindu that instead of be Power The three power distribu companies TPDDL, tion BYPL and BRPL -- have not been sourcing power from the Bawana plant this season because power ,from other plants is available at cheaper "Its erratic functioning sco 750 MW power plant at Bamnauli has not materialised be-j cause the government is unable to arrange gas supply for it. "Only some ground the plant is yet to begin," said a Transco official. Giving óilfield to Essar code violation:' AAP New Delhi: The Aam Aadml Party (AAP) has sought Elec- Commission's tion intervento prevent the government from giving an oil field tlpn to the Essar group and reReliance's contract newing for three gas basins saying these were major policy decisions and violation of the model code of conduct. "Despite the model code being in force, an oil field that was put out for bidding In 1993, 21 years back, and has not been concluded till date, Is sought to be handed over to Essar group on a platter on the eve of elections," party leader Prashant Bhushan said in a complaint to the EC. He added that the petitleumministryhadalsomoved a Cabinet note to allow Reliance to retain three oil fields with huge gas reserves. For ThN tlzefull report, log on to www.timesoflndie.com KG-D6 OilMin seeks legal opiniön on BP & Niko arbitration notices 2 foreign firms are seeking to joln arbitration to receive doubled natural gas price when RIL gets to enjöy it NEW DELHI: 11w Oil Ministryhas sought legal opinion on the arbitration - -.;5 4r notices slapped by Brit ish energy giant. BP and .t Niko Resources of Canada - against levy of penalties for t KG-D6 gas production ln short oftarget. :" . 8? andNiko, whichfiled separate arbitration notices on 23 March, --_r .' the revenue after furnishing the bank . . respond to die notices. Tbc two firms are seek to join the arbitration t' . incremental revenue escrow account _________ tAt the government should considered for 1W and Niko was to put their share of 4.. .". iat . & in an during the arbitration. Tobrealcthimpasse,BP cent in KG-D6, have now served the notice ofarbitra- However, RIL, the cozitrac Tor sureties. An option that was being tion and formally joinin die legal dispute. Sources said EP and of die eastern offshore against levy of the penalty mg KG-D6 block, would have to ftirnish bank guarantees Niko have taken an almost and the two foreign part so that equivalent to die incremen siniilar line as ners are seeking to join die same. i ... %.. - government . IcG-D6 block with 60 per cent mterest, would get all .-; : ".J" for KG-D6 output lagging RIL bad in 2012 initiated arbitration proceedings -' :.;.. . .‚.- t 'rfrY tt. &lLjiti4 bfflionfpeLhies targets. -.. .' !" are seeking to slapped by die -! arbitration process, sources said. RIL, die operator of t!;s/jhj:fLt joln their partner Reliance $18 . rZ?r! Sources said die minis try has asked law officers if die Notice of Arbitra tion issued by 8? and Niko were in accordance widi die provisions of the Pro ducilon Sharing Contracts they too can get die soon-to-be-implemented revised natural gas prices. 'rhey were faced with a situation where die near doubling of die gas rate to deliberately produced less gas from the Dl and D fields in KG-D6. While ML next financial year would ment in die present form. lt also wanted to knowhow apply not diat die new gas rate would to all producers. - proved that the company ish thermal units from die acceptable by die govern and should they be 'Ihis bank guarantee would be encashed if it is about $8.3 per million Brit accrüe to them. The Cabinet had stipu lated in December last year (PSC) tal revenue it would get from die new rate. RIL in its 2012 arbitration against the levy of a$1.8 billion pen alty for output dropping to a 1 Oth of the targeted 80 md- lion standard cubic meters a day. The two firms, lii« RIL, maintain that die pro- agreed to die condition, die duction sharing contract does not provide for a pen- Oil Ministry felt bankguar alty antees could not be takei costs incurred from 1W and Niko because behind projections made in they weit not part of the in the form ot denying if output lags field investment plans. Pll Iran may supply gas at $3/mmbtu for Indian firnis' ureu plant itt NEW DELHI: Iran is assure isupply ofgas at fixed likely to supply gas at $3 rate and India per mmbtu for Indias pro posed urea and ammonia total quantity of soil nutrients produced at the pro- plant to Persian triya be set up Gulf natipn. in the Rash Chemicals and F& tilisers (RCF) am! Gujarat will lift the posed plant. Work on the project has expedited following the lifting of sanctions pn Iran by the IJS in Nannada Valley Fertilis ers & Chemicals (GNFC) November last year. Iran bad struck a deal with have been jointly working world powers to curb nuelear programme this project. The proj ect will also include an Ira nian firm. ort The project is proposed to be set up at a petro chemicals hub at Chahba its ja return for some sanctions Relief and no new nuclear related sanctions on the country for 6 months. har, Iran, using natural gas The Fertiliser Ministry had also received a letter as feedstock with an esti from the mated inviting a delegation from investment ofabout Rs 7,000 crore. 'Talks are at an advanced stage and there have been indications from the nian Ira authorities for suppy Iranian embassy India to discuss gas prices and supply for the pro- posed urea plant there, sources added. However, the Indian government is Ing gas at $3 per mmbtu already in talks with Iran sources said. to provide financial assis As per the proposal, the Iraninan government will tance and bar port. develop Chaba C OIL plans to bid for Murphy's $2b assets GEORGE SMITH ALEXANDER .8b penalty for shortfall in KG-D6 output Firms gear up to fight $ PRESS TRUST OF INDIA Share of LNG in India's gas __ __ _ _ _ _ _ _-_ _ _ No Favour from Govt, RIL Tells SC ENS Economic Bureau New Delhi: Reliance Indus tries Ltd (RTL) on Wednesday informed the Supreme Court that it did not receive any fa your from the government in the contract for exploration of oil and gas from Krishna-Go davari (K-G) basin, Senior advocate Harish Salve, appearing for RIL, de nied allegations of favour and collusion arid said the company was in dispute with the govern ment on several issues. "Far from being a favour to the contractor (RIL), the gov ernment has denied contractor its contractual rights underthe PSC (production sharing con ________ he submitted before a three-bench headed byJustice 'B S Chauhan. Salve said that the company itself has some reservation about Rangarajan Committee recommendations which de vised the formula for gas pric tract)," ing. The RIL submitted that the PSC along with other docu ments shows that KG basin's gas price is not to be based on costs and iSbased upon a mar- ket determined price. While arguing the mailer for Salve explained the nitty RJ 5 ritty of the gas exploration with a scale model of KG Basin -Do gas field. The court had commenced the hearing on the PILs filedby senior CPI MP Gurudas Das gupta and NGO, Common Cause, which have sought impositn ofenalty on private parties for failure to adhere to commitments. 1L had refuted allegation of extraneous consideration for the increase in the gas price from $4.2 to $8.4 per mmBtu forthe gas taken from the exist ing fields like KG 0-6 basin.
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