Breach of trust by GAIL over talks angers Reliance

Vol 8, PW 6 (16 Jun 04) Midstream & Downstream

Reliance might think again before it talks to GAIL.

What trust existed between the two companies will have disappeared following revelation of the contents of GAILs presentation to the ministry on 28th April. Most irritating for Reliance is GAILs decision to reveal that the two companies were in talks about the proposed pipeline from Kakinada to Uran.

As a private sector company, Reliance takes confidentiality seriously and is bitter that GAIL chose to release details of the talks, much of which appeared in the local press. GAIL mentioned an ongoing negotiation with Reliance for laying the Kakinada to Uran pipeline, writes Reliance to the oil ministry.

GAIL had approached Reliance with a proposal to lay the pipeline but no agreement could be reached. Talks have been suspended as no agreement is expected to be reached.

A source tells PETROWATCH that when GAIL first offered to transport gas from KG-DWN-98/3 Reliance stressed that it would prefer to transport and market the gas on its own. But we agreed to explore the possibility of any win-win solution if GAIL could meet our objectives within the stipulated time, with the basic understanding that this would remain confidential.

Reliance is also unhappy that GAILs 28th April presentation, knowingly or unknowingly, might have delayed the ROU approval process of Reliances own gas pipeline proposals which were otherwise progressing satisfactorily. This impression, will seriously impede any further discussions with GAIL.

Reliance is clear that it wants to lay its own pipelines to meet its downstream commitment and captive requirement of the (Reliance) group. Reliance stresses that the ministry approved its pipeline proposals before GAIL unveiled plans for a national gas grid and before the ministrys September 2003 announcement of a draft gas pipeline policy.

Any delay in approval, insists Reliance, is unjustified.

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