India’s ONGC to partner fertilizer company for urea project

17 April 2012 09:20  [Source: ICIS news]

By Ajoy Das

India’s ONGC to partner fertilizer company for urea projectKOLKATA (ICIS)--India’s Oil and Natural Gas Corporation (ONGC) will make its first diversification into urea by partnering a fertilizer company on a $ 970m (€737m) project in Tripura province, a company official said on Tuesday.

“We are keen to implement the project in collaboration with an investor with experience in fertilizer business,” the official said.

“ONGC has received six proposals from domestic and global fertilizer companies and they are currently being appraised,” he added without disclosing identities of prospective collaborators on the grounds that he was not authorized to speak on the issue.

Rashtriya Chemicals and Fertiliser Limited (RCFL) and Indian Farmers’ Fertiliser Co-operative Limited (Iffco), both owned by the Indian government, were said to be keen to partner ONGC but this could not be confirmed by the respective companies.

“ONGC is currently preparing a feasibility report on the project site for urea production based on gas supplied from the company’s wells in the region. The template capacity will be decided during the preparation of the detailed project report and the selection of the joint venture partner,” the official said.

The company has 11 gas fields in Tripura and it produced 643.9m cubic metres (cbm) of gas in 2011-2012.

ONGC’s project is the second greenfield urea production unit being planned in India’s northeastern states.

Brahmaputra Valley Fertiliser Corporation Limited (BVFCL) is collaborating with Oil India Limited (OIL) to implement a $780m urea plant with a capacity of 864,000 tonne/year in Assam.

These projects are part of the Indian Fertiliser and Chemical Ministry’s efforts to increase gas-based urea production capacity to bridge the growing demand-supply gap.

The country’s consumption of urea was currently pegged at 30m tonnes and domestic production at 21m tonne, with the shortfall being met through imports.

The Ministry has set a target to create an additional urea capacity of 10m tonnes/ year by 2016 based on gas sourced from importers like Petronet LNG and Gail India.

The country’s predominantly agrarian eastern and north eastern states have been facing an acute shortage of urea, and this has led to large-scale smuggling of the fertilizer from Bangladesh which borders both eastern and north-eastern provinces.

According to the official, ONGC is planning to build a urea plant for West Bengal province, but this project is still at the preliminary stage.



Author: Ajoy Das



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