RCF needs 200,000 cm/d R-LNG

Vol 24, PW 19 (12 Aug 21) News in Brief

Rashtriya Chemicals and Fertilizers (RCF) wants more than 200,000 cm/d R-LNG to produce high-grade NPK fertiliser at its Trombay plant in Mumbai.

"We can only use our domestic gas allocation to manufacture (low-grade) urea," reports an RCF source. "The government does not allow us to manufacture high-grade products with domestic gas, so for this, we buy R-LNG."

On July 22 (2021), RCF issued a global tender for the supply of 207,610-cm/d R-LNG from October 1 (2021) to October 1 (2022). "As a company, we only ever issue gas procurement tenders for one year," he adds.

"In this way, we can secure the best market rate." GAIL, IndianOil, BPCL and GSPC are likely bidders for the contract to deliver R-LNG to a GAIL metering station inside the RCF Trombay plant.

Whoever wins will be responsible for signing a Gas Transmission Agreement (GTA) with GAIL. RCF offers several pricing options to prospective bidders: either Brent, ICE, the JKM or a fixed/static price during the year-long contract.

RCF adds it reserves the right to reduce the Daily Contracted Quantity (DCQ) if, during the contract period, the government allows the use of domestic gas to produce high-grade NPK fertilisers. RCF is India's fourth-largest fertiliser manufacturer and in 2019-20 spent Rs5328.73cr ($716m) buying domestic gas and R-LNG from GAIL, IndianOil and BPCL.