Plans to market majority of urea to be produced from Tripura plant; also looking to invest in power and petrochemical plants
After securing two shallow water gas blocks in Bangladesh through its overseas arm, state-run Oil and Natural Gas Corp Ltd (ONGC) is now eying on the fertiliser market of the neighboring country.
The company plans to market majority of urea to be produced from its planned Tripura plant in Bangladesh. Chambal Fertilisers and Chemicals Ltd (CFCL) and the state government will also join hands with ONGC to market the fertiliser in Bangladesh.
ONGC Videsh Ltd (OVL), along with Oil India Ltd, had grabbed the Bangladesh gas blocks in a competitive bidding process last month. The company is also looking to invest in power, petrochemical and fertiliser plants in the South Asian nation.
“The plant is likely to be commissioned by the second half of 2017. Then we are mainly looking at transporting urea through waterways to cater to the market in Bangladesh. In addition to this, we are also eyeing the northeast market,” Sudhir Vasudeva, chairman and managing director of ONGC, told Business Standard.
ONGC, CFCL and the state government signed a memorandum of understanding in April for the fertiliser project. “We had significant reserves in Khubal (Tripura) under an NELP (new exploration licensing policy) acreage, which otherwise could have got stranded. In order to monetise this, the state government said rather than going for a power plant, a fertliser unit would serve the purpose,” he added.
ONGC would invest Rs 5,000 crore for the 1.3-million-tonne urea plant, which would utilise 2.4 million standard cubic meter per day of gas. The state government is likely to have 10 per cent equity in the project. The company had selected CFCL as a strategic partner through a transparent selection process.
However, the fertiliser complex would need allocation of natural gas by the empowered group of ministers of the Central government for meeting its feedstock requirement. The state government had also ensured support by way of assistance in creation of infrastructure, availability of water and for evacuation of the fertiliser produced from the project.
For ONGC, this would be important as it may open up the South Asian market through Bangladesh for the exploration major.
The company had secured SS-04 and SS-09 in that country, when all other players except OVL and the US-based ConocoPhillips deserted the bidding process. This was considered a strategic move as Bangladesh does not allow export of natural gas from the country.
Bangladesh Petroleum Exploration and Production Co Ltd, a subsidiary of Petrobangla, will have a 10 per cent stake in each of these blocks. Along with these blocks, OVL also got the right to explore Bangladesh’s first offshore gas field Kutubdia.
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