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| Fertilizer Min seeks over 43 mmscmd of RIL gas |
| Press Trust of India / New Delhi Sep 14, 2009, 18:00 IST |
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Joining the scramble for natural gas from the Reliance Industries' (RIL) fields, the Fertilizer Ministry has sought over 43 million metric standard cubic meter a day (mmscmd) of additional gas to revive the closed urea making plants.
Fertilizer Secretary Atul Chaturvedi has written to Cabinet Secretary K M Chandrasekhar demanding 43.47 mmscmd gas "to convert all existing non-gas based units to gas, revive closed urea units and for setting up of expansion projects."
"The onset of supplies of natural gas from (RIL's) KG-D6 has helped to meet the existing shortfall of natural gas for the fertilizer sector," he wrote on September 8.
Urea manufacturing plants were accorded top most priority by the Empowered Group of Minister (EGoM) deciding on the allocation of KG-D6 gas. 12 fertilizer firms got 15 mmscmd.
Chaturvedi said the EGoM approved gas utilisation policy has "no provision for a prior commitment of gas to enable financial closure of investments.
"In the absence of same, neither industry can initiate investments nor it will be ready for receipt of gas in spite of having the first priority."
Petroleum Minister Murli Deora has already asked Prime Minister to form a new EGoM to decide on allocating KG-D6 gas beyond the first 40 mmscmd that was decided by the previous ministerial panel. The new EGoM is, however, yet to be formed.
"The fertilizer industry is a capital intensive industry and hence, the investments towards setting up of a new expansion project, revival project or conversion of non-gas based units is contingent upon a firm commitment towards gas availability at a future date," Chaturvedi wrote.
He wanted price of natural gas supplied to fertilizer plants from various sources to be pooled so as to facilitate movement towards a nutrient-based subsidy policy.
Currently, fertilizer plants buy gas at rates ranging from $1.97 per million British thermal unit (APM or Government regulated rates) to $8.2 per mmBtu (imported LNG). RIL's KG-D6 gas is priced at $4.2 per mmBtu.
Chaturvedi also demanded a review of the existing gas pipeline transportation tariffs with an "aim to ensure that the tariffs (are) uniform (across the country)."
Chaturvedi said 8.05 mmscmd of additional gas was needed in the current year to convert naphtha-based plants like the ones in Goa, Tuticorin, Mangalore and Manali. Next year, an additional 3.75 mmscmd would be needed to convert fuel oil based plants while 13.9 mmscmd would be needed for expansion projects during 2011 to 2013. An additional 17.6 mmscmd gas would be required for reviving eight closed plants.
Power Ministry has already sought 80 mmscmd of gas while RIL wants 18-19 mmscmd for its refinery and chemical plants.
RIL's KG-D6 fields, which are currently producing 36-37 mmscmd of gas, will hit a peak output of 80 mmscmd by year end.
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