RCF, GAIL, CIL to revive Talcher unit with Rs 8k cr investment

The chimneys of the Talcher urea unit in Orissa will start billowing smoke once again, with state-owned RCF, GAIL and CIL having agreed to revive the facility, which may entail an investment of around Rs 8,000 crore.

"Rashtriya Chemicals and Fertilisers, Coal India and Gas Authority of India have agreed to jointly take up the revival of the Talcher unit using coal-based gas technology. The revival may require an investment of around Rs 7,000-8,000 crore," Minister of State for Chemical and Fertiliser Srikant Jena told PTI.

Production at the Talcher urea unit, owned by the erstwhile Fertiliser Corporation of India, was stopped in 1999 because of low efficiency of production by the NDA government. The talk of a revival started when the UPA government decided to reopen all the closed urea units in the country, including the Talcher facility.

The reopening of the unit gained momentum when a consortium of RCF, GAIL and CIL approached the government to run the unit using coal-based gas technology for supplying fuel.

The ministry was examining the proposal and had recently sent a delegation comprising government and industry officials to visit China to assess the feasibility of coal-gas technology for revival of the unit.

China has a globally-recognised coal-based gas technology and almost 76 per cent of urea and ammonia units in China are fired through gas produced using that technology.

"The delegation was very pleased to see the success story of coal-based gas technology in China and felt that the same can be replicated for the revival of the Talcher unit," a government official said.

The delegation will submit the report officially to the fertiliser ministry in a few days, following which all the modalities of the revival plan will be worked out.

"The new shareholding pattern, exact amount of investment and the like will be decided after that," the minister said.

Upon revival, the capacity of the Talcher unit will also be increased to 11 lakh tonnes per annum.

The revival of the unit will reduce the subsidy burden on the government on urea imports.

India will have to import more than 116 lakh tonnes of fertiliser to meet its domestic need for the current kharif season, ending September, which includes 30 lakh tonnes of urea.