Three fertiliser plants refused D6 gas by oil ministry

Vol 12, PW 18 (12 Feb 09) Midstream & Downstream

When the tap is finally turned on at Reliance’s D6 fields in the eastern offshore, three fertiliser plants expecting gas supplies from India’s first deepwater gas development project will be disappointed to hear that an oil ministry bureaucrat thinks they do not qualify.

PETROWATCH learns that the first two, Gujarat Narmada Fertilizers (GNFC) and Deepak Fertilisers and Petrochemicals, were originally slated to get D6 gas until someone in the oil ministry read the fine print of a note from the special cabinet committee handling the allocations. “Both names were at first included due to some confusion,â€‌ we hear, “but were later removed.

â€‌ Only companies who make urea from gas as raw material are eligible. GNFC does produce urea at its Bharuch factory but from fuel oil, not gas.

Deepak Fertilizers outside Mumbai produces ammonia, not urea. “If both companies are to get D6 gas,â€‌ a source says, “the oil ministry will have to go back to cabinet to get its decision amended and that can’t happen.

â€‌ The third company to be disappointed will be state-owned IFFCO’s factory at Kalol in Gujarat, which produces urea from gas, but was struck off because it lacks connectivity to the D6 gas pipeline. Below is a list of fertiliser companies who will receive D6 gas: Fertiliser companies to receive D6 gas Company Location Quantity Gas delivered to companies along the HBJ trunk pipeline National Fertilisers Guna 650,000 cm/d KRIBHCO Shahjahanpur 978,000 cm/d IFFCO Aonla 1.75m cm/d IFFCO Phulpur 520,000 cm/d Chambal Fertilisers Gadepan 1.15m cm/d Tata Chemicals Babrala 880,000 cm/d Indo-Gulf Fertilisers Jagdishpur 478,000 cm/d Shriram Fertilisers Kota 620,000 cm/d Gas delivered in Gujarat from Reliance’s 'East-West' pipeline KRIBHCO Hazira 1.37m cm/d Gujarat Fertilisers Fertilizernagar 720,000 cm/d Gas delivered to Mumbai region from Reliance’s â€کEast-West’ pipeline Rashtriya Chemicals Trombay 975,000 cm/d Rashtriya Chemicals Thal 2.1m cm/d Gas delivered to Andhra region from Reliance’s â€کEast-West’ pipeline Nagarjuna Fertilisers Nagarjuna Hills 1.549m cm/d Total: 13.74m cm/dAll nine companies above will pay $4.20/mmbtu plus transportation charges and taxes for D6 gas.

Transportation for Nagarjuna Fertilisers will be almost zero as its factory is located onland in the KG Basin, making it the first fertiliser company to get D6 gas from the â€کEast-West’ pipeline to western and northern India. Fertiliser factories along the HBJ, in Gujarat, in north India and in the Mumbai region, must pay an additional $1/mmbtu in transportation charges.

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