Fertiliser companies are seeking an additional 25 million metric standard cubic metres/day (mmscmd) of natural gas supply from Reliance Industries Ltd's (RIL) Krishna-Godavari fields to cater to the feedstock needs of their existing as well as proposed new urea capacities.
Currently, there are 17 gas-based urea plants with an aggregate production capacity of over 180 lakh tonnes (lt).
Their estimated gas requirement of roughly 43.5 mmscmd is more or less met through supplies of 42.5 mmscmd, which includes 15.3 mmscmd allocation from RIL and the rest from ONGC, the Panna-Mukta-Tapti joint venture fields and other sources.
Naphtha to gas conversion
But apart from them, there are five units now running on naphtha (Zuari Industries' Goa, Mangalore Chemicals & Fertilisers, SPIC's Tuticorin, Madras Fertilisers' Manali and FACT's Kochi) and four on fuel oil (Gujarat Narmada Fertilisers' Bharuch and National Fertilisers' Panipat, Nangal and Bhatinda) that are planning to switch over to gas.
Requirement to rise
The gas requirement of the naphtha-based plants is assessed at 6.7 mmscmd, while working out to 6.2 mmscmd for the four fuel oil-based units.
If the gas needs of these plants (having an installed urea production capacity of 43.5 lt) are also to be met, the total requirement will go up to nearly 56.5 mmscmd.
New capacities
Over and above these are the requirements of new urea capacities proposed to be created.
The Indian Farmers Fertiliser Cooperative (Iffco) wants to put up a 10 lt-plus unit at Kalol, where it already operates a 5.5 lt facility. Rashtriya Chemicals & Fertilisers, Tata Chemicals, Indo-Gulf Fertilisers, Chambal Fertilisers & Chemicals and Krishak Bharat Cooperative are also planning similar ventures adjacent to their existing plants at Thal, Babrala, Jagdishpur, Gadepan and Hazira, respectively.
If the 12-14 mmscmd requirement of the proposed new projects are added, almost 70 mmscmd of gas would be needed to feed a total urea production capacity of 280-290 lt.
More allocation
While this may help considerably bring down the country's increased dependence on urea imports (see Table), it would, however, entail allocating another 25-27 mmscmd of gas, mainly from the RIL fields.
“Work on the new Kalol project is subject to our securing a firm gas allocation at a competitive price from the Government. Without this letter of comfort, the project cannot be bankable”, Iffco's Managing Director, Dr U.S. Awasthi, told Business Line.
Ambani dispute
Fertiliser industry officials note that the Supreme Court recent judgement pertaining to the Ambani brothers' dispute has upheld the Government's supremacy over allocation and pricing of gas even if produced by private parties.
Since the Government policy already accords the highest priority to fertilisers, this should now get reflected in additional gas allocations to the sector, they say.
The RIL fields are currently pumping over 60 mmscmd of gas, which is expected to eventually be ramped up to 120 mmscmd.
Source: Hindu Business Line
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