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GAIL signed a Gas Sales and Purchase Agreement (GSPA) on August 28 for buying 2.6 million standard cubic meter per day of gas from RIL's KG-D6 fields at Government approved price of USD 4.2 per million British thermal unit.
"We have signed the GSPA and gas supplies are likely to begin from September 3," a GAIL official said.
The state-run firm will use the gas sourced from KG-D6 at six LPG production plants.
The Government had placed LPG plants at priority number three after fertiliser and power plants, for receipt of KG-D6 gas. Other sectors identified included city gas and steel.
RIL has so far contracted gas supplies to 15 fertiliser firms, 19 power plants and three steel makers.
It is currently producing around 37 mmscmd gas from KG-D6, half of which goes to power plants.
The firm has the capacity to produce a little less than 60 mmscmd but is constrained to produce less as the Government is yet to identify customers for buying gas beyond the initial 40 mmscmd, allocated primarily to fertiliser and power producers in accordance with the Gas Utilisation Policy.
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Being a state entity which is dependent on the mercy of the Parent Petroleum Ministry for running its day to day affairs what else can U expect!! Where are all those Private Parties in each of these Priority Sectors whom RIL had paraded with their Price bids to Mandate the $4.2 MMBTU Price that its seeking....its a shame that Govt. Of India wants $2.3 Price for NTPC while forcing GAIL to sign at $4.2 MMBTU....The Supreme Court shall take the wind out of the Govt. of India's apparent Biased and Malicious stand of Playing games between the Ambani Brothers who ultimately shall be the Sole Benefeceiaries.....SATYAMEV JAYATE!!