HYDERABAD - Amid the ongoing legal battle between the Ambani brothers over supply and price of gas from the Krishna-Godavari (KG) basin, off the Andhra Pradesh coast, the state government Tuesday said it would fight for its reasonable share of gas and royalties.

Chief Minister Y.S. Rajasekhara Reddy has asked two companies to take up creation of City Gas Distribution (CGD) network to supply piped gas for cooking to every household and CNG for vehicles in Hyderabad and other municipalities in the first phase.

The chief minister, who held a review meeting with top officials on the issue, announced that his government would soon enter into a memorandum of understanding (MoU) in this regard.

“A meeting of the concerned companies will be held at the earliest to see that an MoU is signed in this regard. The details like the cost of infrastructure will be worked out at the meeting,” said a statement from the chief minister’s office released Tuesday evening.

A few hours after his government assured the state assembly that it would fight for the state’s due share in the gas and royalties, the chief minister asked Krishna-Godavari Gas Network Ltd (KGGNL) and Bhagyanagar Gas Ltd to take up CGD network creation in the state.

The state government is also proposing to approach the petroleum regulatory board to grant the permission for setting up CGD to KGGNL and Bhagyanagar on nomination basis.

Reddy hoped that once the CGD network is created, the prices of gas would come down by 40 percent.

YSR, as the chief minister is popularly known, was satisfied that Reliance Industries was presently supplying 10 million metric standard cubic metre per day (mmscmd) for gas-based power projects in Andhra Pradesh, meeting the state’s present requirement.

He said the state was also making all efforts to get another 8.5 mmscmd of gas required for the 2100-MW power project coming up in Karimnagar district.

Out of four companies which were awarded various blocks in the KG basin by the central government, only Reliance Industries has started gas production.

Reliance Industries started supplying gas from the first week of April beginning with five mmscmd.