31 December 2012 07:35 [Source: ICIS news]
KOLKATA (ICIS)--India’s government-owned National Fertliser Limited (NFL) will finalise natural gas imports over the next three months as it is faced with a shortage of gas feedstock, a senior official at the Department of Chemicals and Fertlizers said on Monday.
“Importing liquefied natural gas (LNG) had become an imperative for NLF since projects for switching feedstock from fuel oils to natural gas at three of its plants would be complete within the next one month,” the official said.
“NFL has sought clearance from the Department for import of natural gas feedstock since sufficient domestic supplies of natural gas were not available to operate the three plants at optimal capacity utilization,” the official added.
According to the official, NFL had also sought clearance to tie up LNG imports through a tendering process instead of the usual long term contract or via bookings in the spot market since the fertilizer producer was confident of securing supplies at competitive prices through tenders.
While the quantity of LNG imported supplies required has yet to be determined, the three NFL plants will have require about 2.8 million standard cubic meters per day (mscmd) of the feedstock for its plants at Nangal, Panipat and Bhatinda, all in northern India.
The quantity of imports required will depend on the quantity of LNG that is available from GAIL India Limited with which NFL had signed an agreement in 2009 for the supply of feedstock to the revamped fertilizer plants.
However, given the shortage of natural gas available to fertilizer and power generation plants, the total requirement could not be met by GAIL, the official added.
Indian domestic natural gas resources are allocated to user industries with priority accorded to power generation and fertiliser production while any deficit in supply are normally met through imports by individual companies.
While NFL would be looking at LNG resources from international markets, natural gas trading companies based in India like LNG Petronet or GAIL India would also be eligible to bid in the supply tender, according to the government official.
NFL has a total installed urea production capacity of 32.3m tonnes across its plants located at Nangal and Bhatinda in Punjab province, Panipat in Haryana and Vijaipur in the central province of Madhya Pradesh.
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