FACT resumes use of LNG at its ammonia plant

Fertilizers and Chemicals Travancore (FACT) has resumed use of LNG in its ammonia plant. LNG was pumped into the boiler on Tuesday at a function held at the ammonia plant. Within a couple of days, LNG will be pumped directly into the plant and production of ammonia is expected to commence within a week.

The company had stopped the use of LNG in January last year when the price of the gas went up to $24 per unit (mmbtu).

Along with the fall in the price of crude oil in the international market, there has been a steep fall in the price of natural gas also. Now, FACT is getting LNG at the rate of $10.9 per unit. Though the state government has formally announced waiver of VAT for LNG, an official notification in this regard is yet to be released. It is expected that the official notification will be issued shortly.

Use of LNG in FACT has been facilitated through MMTC, a central government institution as they deal directly with GAIL and arrange payment to the suppliers. FACT has an agreement with MMTC for supply of LNG at $10.9 per unit till April 21, 2015, a press release said.