Severe gas shortages cripple production of fertilisers

Vol 9, PW 13 (06 Oct 05) People & Policy

Three fertiliser factories are worst hit by the countrywide shortage of gas: the Kakinada factory of Nagarjuna Fertilisers and Chemicals; Thal and Trombay factories of Rashtriya Chemicals & Fertilisers; and the Namrup factory of Brahmaputra Valley Fertilisers & Chemicals.

Nagarjuna has a firm allocation of 2.14m-cm/d and fall-back allocation of 0.61m cm/d. But even when gas availability improved in the KG basin a few years ago, argues the fertiliser ministry, the fall-back quantity was not allocated to Nagarjuna.

Instead, gas was allocated to power stations that came up later, resulting in gas shortage and distribution of available gas to all consumers on pro-rata basis. Nagarjuna gets only 1.9m cm/d and is compelled to use costlier naphtha as feedstock.

Expect the situation to worsen, says the fertiliser ministry, because available gas has been allocated to four new power stations without taking a realistic view of actual availability of gas. GVK, Vemagiri, Goutami and Konaseema power stations are all likely to be commissioned next year.

Nagarjunas factory was set up before the power stations, argues the fertiliser ministry, and it should have full rights to the 2.14m cm/d gas that it has been allocated and more when additional gas comes from the KG basin. RCFs factories at Thal and Trombay were hit by disruption in supplies from ONGC after the 27th July fire that destroyed the Mumbai High BHN platform.

Production at Thal and Trombay came to a grinding halt, we are told, but gas supply was briefly resumed only to be stopped again. RCF lost production of 25,000 tonnes urea and 15,000 tonnes of fertilisers in just one week because of this disruption.