UPDATE 1-Reliance not to change D6 gas price from April 1 -govt source

Fri Mar 28, 2014 10:01am EDT
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* To sell at $4.2/mmBtu until new govt takes over -source

* Output from D6 at about 13 mmscmd-govt source (Adds background)

By Nidhi Verma

NEW DELHI, March 28 (Reuters) - Reliance Industries and its partners should continue to sell gas at current prices from its east coast block following a delay to a new pricing regime ordered by India's election authority, a government source said on Friday.

Reliance's five-year gas sales pacts with sectors including fertiliser makers and power will expire on March 31, requiring buyers to sign new contracts for supplies from its D6 block in the Krishna Godavari basin.

"$4.2 (per million British thermal unit or mmBtu) will continue to be in force until the Code of Conduct is lifted," said the source, referring to rules restricting policy shifts before elections. India goes to the polls on April 7.

The oil ministry informed the upstream regulator - the Directorate General of Hydrocarbons (DGH) - of the pricing decision after it was cleared by Oil Minister Veerappa Moily on Friday.

"The DGH will have to now inform the companies concerned," said the source, who requested anonymity due to the sensitivity of the matter.

Both Reliance and the upstream regulator declined immediate comment.   Continued...