New Delhi: Nearly a month after a panel of ministers approved price of gas to be produced from Reliance Industries' eastern offshore KG-D6 fields, the Government on Thursday issued formal approval letter to the Mukesh Ambani firm.
"The letter approving a price of $4.20 per million British thermal unit (mBtu) for first five years of production from KG-D6 was issued by the Petroleum Ministry today," PTI quoted a source familiar with the development as saying.
An Empowered Group of Ministers headed by External Affairs Minister Pranab Mukherjee had on September 12 approved with minor changes a price formula proposed by RIL.
"The letter was issued after the Law Ministry vetted all legal issues," the source said.
However, the RIL officials were not available for comments.
The approval will be for five years from July 2008, after which it would be reviewed again.
The source said the letter mentions that the price approval will be without prejudice to the NTPC vs RIL and RNRL vs RIL court cases.
State-run NTPC has taken RIL to court to get gas for its power plants at $2.34 dollars per mBtu price the Mukesh Ambani firm had quoted in a 2004 tender. RIL says the contract was not concluded over certain provisions.
Sources said RIL, however, cannot immediately sign gas sales agreements with consumers in power and fertilizer sectors as the Bombay High Court in an interim order had restrained RIL from selling gas to anyone other than NTPC, ADAG or to itself.
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