Tata Chem to sign pact with RIL for gas supply

Tata Chemicals is likely to sign on Friday an agreement to buy natural gas from Reliance Industries (RIL) for its 11.55-lakh tonne urea plant in Uttar Pradesh, a senior company official said today.

"Very soon we will sign the contract with RIL and expect gas supply to begin from April," Tata Chemicals Executive Director Kapil Mehan told reporters here.

The Gas Sales and Purchase Agreement (GSPA) is likely to be signed on March 6 along with eight other fertiliser units that are to get Reliance's eastern offshore KG-D6 gas.

Tata Chemical's Babrala unit will get 0.88 million cubic meters per day of gas from KG-D6 to bridge the current fuel deficit of the unit which produces both urea and ammonia.

He said the Babrala unit is the first in the country to run on dual fuels - naphtha and gas.

After 0.88 mmscmd gas from RIL, the plant's entire 2.24 mmscmd gas requirement would be fully met. The plant had recently completed debottlenecking process.

Tata Chemicals will pay $4.20 per million British thermal unit price plus transportation charges and taxes, he said.

Mehan added the Babrala unit currently receives 1.46 mmscmd gas from the state gas utility GAIL India and the Indian Oil Corp (IOC).