Reliance Industries may provide $120-135 m bank guarantee.

Reliance Industries and its two international partners in the KG-D6 block are likely to extend a bank guarantee of $120-135 million (Rs. 750-850 crore) to get the benefits of higher gas price.

Though the Petroleum and Natural Gas Ministry is yet to inform the three players — Reliance, BP and Niko — about the figures, the estimates are based on the proposed formula.

'What we understand is that the bank guarantee will be based on the actual daily output of the D-1 and D-3 fields (the producing fields in the D6 block off the Andhra Pradesh coast) multiplied by the difference between the new and the existing gas prices and the number of days of production,' said B. K. Ganguly President and COO (Business Operations Explorations and Production), RIL.

'Once we agree on the principles of bank guarantee calculations and the process of furnishing it, we don’t expect it to take long to implement,' Ganguly told Business Line.

HBL