Can't terminate RIL's KG-D6 gas contract on target issue: Moily tells PM

While the contract provides for termination in case of a default by a contractor, the Oil Ministry under S Jaipal Reddy in May 2012 had slapped penalty of $1.005 billion on RIL for failing to produce natural gas in line with the pre-stated targets. New Delhi: With AAP leader Arvind Kejriwal making the hike in gas prices an election issue, Oil Minister M Veerappa Moily has written to Prime Minister Manmohan Singh saying Reliance Industries’ contract for KG-D6 gas fields cannot be terminated pending arbitration on issue of output lagging targets. His letter came in response to charges by Kejriwal that the government was favouring RIL by nearly doubling natural gas prices from 1 April, 2014. Explaining the reasons behind raising natural gas prices from April, Moily said several gas fields of both RIL and state-owned Oil and Natural Gas Corp were economically unviable to produce at current rate of $4.2 per million British thermal unit.