29 November 2012 06:30 [Source: ICIS news]
KOLKATA (ICIS)--Ghana’s upcoming national elections has placed discussions over a major fertilizer investment of India’s Rashtriya Chemicals and Fertiliser Ltd (RCFL) in the African country in the backburner, an Indian government official said on Thursday.
RCFL is planning to build a 1.1m tonne/year urea project worth $1.2bn (€924m) in the western African country, subject to some conditions related to feedstock supply.
“India had sought assurances on feedstock supplies and prices from the Ghana government. A proposal for setting up a joint working group on feedstock supplies to the project has now been put on hold because of the Ghana national elections, early next month,” the senior official from the Department of Chemicals and Fertiliser said.
Ghana goes to the polls on December 7 to elect its new president, with eight candidates vying for the post.
Postponement of talks on the fertilizer investment is likely to affect the timetable that was initially set for RCFL’s urea project in Ghana.
“From Indian investment point of view, no date can be set for commencement of the project nor is it possible to fix [a] schedule for commercial production without finalization of gas pricing policy, the official said.
“When the project was first conceived in 2010, a completion date of 2015 had been considered which was not realistically feasible under current circumstances,” the official said.
The Indian government has sought natural gas supplies for the project at around $2-2.5 per million metric British thermal unit (mmBtu). The Ghana government, however, said that prices would have to be benchmarked to its national gas policy, which was yet to be framed, the Indian government official said.
For Ghana, natural resources, including oil and natural gas, figure prominently in the manifestos of all major political parties in the African country, according to India’s Ministry for External Affairs (MEA).
“A final call rests with the new government in Ghana,” the government official said.
A severe domestic shortage of fertilizer feedstock/raw material in India drives its major producers – including RCFL and , Indian Farmers’ Fertlizer Co-operative Limited (IFFCO) – to compete for a number of joint ventures in Canada, Mozambique, Egypt, Nigeria and Togo, the official said.
“[The] Indian government would have to prioritise such investments based on timelines,” he said.
RCFL is among India’s largest producers of basic chemicals, urea and complex fertilizer, with operations at Thal and Trombay in the western province of Maharashtra.
($1 = €0.77)
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