Reliance Industries Ltd and its arm BP Plc of UK have committed to pay in cash for any natural gas volumes they are unable to deliver to customers from the next wave of discoveries in the eastern offshore KG-D6 block.

According to draft gas sales and purchase agreement (GSPA) Reliance and BP have shared along with price discovery bids for incremental gas from the R-Cluster fields in KG-D6 block, the sellers will reimburse buyer money equivalent to gas sourced from alternate source to make up for any volumes they are unable to deliver. The buyer on his part will be obliged to offtake the committed gas volumes or pay for it (take or pay). The volumes not taken but paid for can be taken in subsequent quarters, the GSPA said.

These ships or pay and take or pay obligations will be waived in the event of force majeure events such as any act of God like earthquake and floods, fire, epidemic, acts of war, strike and lockouts, delays due to government/ regulatory actions. Also, "loss, failure, impediment, restriction in output or deliverability of reservoirs in the gas fields" will be a force majeure event, it said. Reliance had a decade back signed up to sell 60 million standard cubic metres per day of gas from the first set of gas fields in the KG-D6 block, but the output rapidly declined due to reservoir issues., leaving users such as power plants stranded.

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