KG Basin_ProjectsMonitor

It is not just the gas price which is going to be raised steeply next year but the terms and conditions of GSPA (Gas Supply and Purchase Agreement) also may undergo sea change. This is what the consumers of KG D-6 gas realizing of late. GSPAs signed with Reliance Industries are coming up for renewal in 2014. NTPC, one of the gas consumers, is finding it the hard way while negotiating a fresh GSPA against supply of additional gas.

The proposed GSPA absolves the supplier almost from all the liabilities which he was subjected to while signing the original GSPA. Because of continued fall in the production of gas at KG basin and the chances of production picking up in the near future unlikely, supplier may try to safeguard his position. RIL is likely to insist on no liability for seller for any delay or shortfall or interruption in supply of gas for any reason whatsoever arising out of or in relation to lack of availability of gas from the gas fields or as a result of application of or compliance with any law including Government directives. Further,

RIL may also negotiate hard to delete Ship-or-Pay payments provisions in the GSPA.

Provision relating to pressure at which gas has to be supplied may also be altered to suit the supplier’s convenience. Existing GSPA provides that the supplier has to supply gas at a pressure as required by the transporter. But RIL may insist on provision to supply gas only at pressure on ‘as available’ basis.

With no other options available poor consumers may be left with no alternatives but to sign one sided GSPA.

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