India’s ONGC to set up more gas-based urea plants

14 May 2012 04:17  [Source: ICIS news]

By Ajoy K Das

Farm workers in IndiaKOLKATA (ICIS)--India’s state-owned Oil and natural Gas Corporation (ONGC) Limited is planning to set up more gas-based urea and linked power plants close to its hydro-carbon assets and in areas deficit in fertilizer availability, a company official said on Monday.

“The company will explore possibilities of replicating the model adopted to implement the $970m (€747m) urea production facility in north-eastern province of Tripura, in collaboration with a foreign or domestic fertilizer producer,” the official said.

ONGC has received six proposals for collaboration from Indian and foreign fertilizer producers to set up the urea project in Tripura, which were currently under appraisal.

A feasibility report for the urea plant was also underway based on ONGC’s gas assets in the region and total capacity will be decided on completion of the report and assessment of gas availability, the ONGC official added.

The company has 11 gas fields in Tripura and produced 643.9 million metric standard cubic meters (mmscm) of gas in 2011-12.

According to the official, the government of West Bengal in eastern India, also deficit in fertilizer has approached ONGC to locate one of its proposed urea plants in the province, but a final decision has been kept pending since the area does not have easy accessibility to gas supplies.

ONGC’s diversification plans into fertilizer sector received a fillip earlier this month, when the Indian government directed ONGC not to divert gas to `non-priority’ areas like petrochemicals and power as availability was `very low’.

An Empowered Group of Ministers (EGoM), set up to prioritize gas supplies to different user sectors noted that only 3.84m cubic meters of natural gas was available per day from ONGC’s gas assets across the country of which only 1.92m cubic meters of gas per day could be diverted to users as the balance could not be supplied owing to low pressure.

Hence the EGoM decided that only `priority sectors’ like urea will continue to receive gas from ONGC gas wells and supplies to phosphate and potassic fertilizer producers should be stopped,” a senior official in Ministry of Fertilizer and Chemicals said.

India’s consumption of urea was currently pegged at 30m tonnes against and domestic production at 21m tonnes with the balance met through imports.

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

($1 = €0.77)


Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Ajoy K Das
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