Not everyone believes Kochi terminal will happen

Vol 9, PW 18 (15 Dec 05) Midstream & Downstream

Some fertiliser companies have no confidence in Petronet-LNGs ability to deliver LNG to Kochi.

Take state-owned Fertiliser and Chemicals Travancore (FACT) based in Kerala. On 7th November, FACT invited Expressions of Interest for the supply of between 1.25m cm/d and 2.21m cm/d regassified LNG for its ammonia and urea plants at Udyogmandal and Ambalamedu, despite a MoU in place with Petronet-LNG for future supply from Kochi.

There are some problems and bottlenecks associated with the Kochi project, FACT tells us. And the source of the LNG has not yet been identified.

If we get a guaranteed supply on our own before then we will go for that. Sadly for FACT, no one submitted an EoI by its 10th December deadline, bar the (mysterious!) Liquefied Natural Gas Ltd of Australia.

Yet FACT is not discouraged. The last date is over but we are open to considering other offers also, says a company official.

FACT needs 1.2m cm/d for its Udyogmandal facility and between 50,000 cm/d to 1.01m cm/d for its Kochi facility. FACT uses naphtha for its ammonia plants, and furnace oil for its captive power plant boilers and dryers in the fertiliser plants.

The cost of naphtha and furnace oil is high, he adds. We are looking at switching over to natural gas as feedstock at the earliest.

If it manages to secure an assured supply of LNG, FACT wants to revive its 198,000 t/y ammonia plant and 330, 000 t/y urea plant at Kochi. In 2003, FACT suspended production of urea and ammonia at its Kochi facility, set up in 1970, due to the exorbitant prices of naphtha and furnace oil.

In its EoI notice, FACT writes: With the present cost of production, the operation is not viable. FACT is also looking for a suitable joint venture partner to revamp its existing urea plant at Kochi to produce 1300 t/d.

FACT wants to build a new energy-efficient LNG-based 1350 t/d ammonia plant. Whether anyone will be interested in supplying it is another matter.