SPIC wants ONGC gas for Tuticorin factory

Vol 16, PW 2 (09 Aug 12) Midstream & Downstream
     

Chennai-based BSE-listed Southern Petrochemical Industries (SPIC) wants ONGC gas for its 620,000 t/y urea fertiliser factory near Tuticorin Port in Tamil Nadu.

SPIC executives met oil ministry director gas pricing Sushma Rath on July 6, seeking a gas allocation from ONGC’s Kanjirangudi onshore field at its Cauvery asset. ONGC believes Kanjirangudi can produce up to 1.8 cm/d.

Around 300,000 cm/d is available immediately at Ramnad, located 130-km from Tuticorin, while another 300,000 cm/d should be available by December. But no pipeline connects Ramnad to Tuticorin.

“(SPIC) has given us options (on how to take the gas),” confirms a ministry source. For one, GAIL can lay a dedicated pipeline from Ramnad to Tuticorin, paid for by SPIC, later reimbursed by the fertiliser ministry.

SPIC has yet to approach GAIL with the idea. For now SPIC uses naphtha from IndianOil as raw material and fuel to produce urea, supplied at the Indian rupee equivalent of $23/mmbtu.

In sharp contrast, SPIC expects Kanjirangudi gas at its gate to cost $9/mmbtu, leading to huge fertiliser subsidy savings for the government. SPIC has awarded a contract to Denmark’s Haldor Topsoe for basic engineering to revamp the urea factory so it can begin using gas.

A Pre-Feasibility Design (PFD) is expected by end-August and the basic engineering report in December. After this, state-owned Projects & Development India (PDIL) will begin detailed engineering, expected to take eight months.

SPIC is also considering R-LNG to replace naphtha. But no LNG import terminal is expected on the east coast for at least three years.