New battle breaks out between Ambani siblings

The estranged Ambani brothers found a new battle front to cross swords over even as the larger war on the gas supply from the KG-D6 block awaits the Supreme Court's verdict. Reliance Industries Ltd. (RIL) issued a notice to a power plant run by ADAG owned Reliance Infrastructure Ltd., threatening to stop gas supplies for non-payment of dues for the first fortnight of September. Reliance Infrastructure, which buys 0.56 mmscmd of KG-D6 gas, paid marketing margin on gas till last month but discontinued it this month. It operates the 220 MW Samalkot power plant in the East Godavari region. The plant requires 1.1mn standard cubic meters a day (mmscmd) of gas of which RIL is supplying half on a fall-back basis though the agreement was for 0.19 mmscmd at a price of US$4.2 per million British thermal unit. RIL is charging US$0.135 per million British thermal unit marketing margin on sale of gas from its eastern offshore KG-D6 fields, a levy which was opposed by NTPC. RIL said that the marketing margin it charges is uniform for all the 40-odd customers and is lower than the US$0.17 per mmBtu margin charged by GAIL. Meanwhile, the Power Ministry said it did not approve of RIL charging marketing margin on gas it sold, saying such levies are paid where distribution chain is involved.