2 JVs to be formed for revival of Talcher urea plant in Odisha

CIL and Gail will form the first JV while RCF and FCIL will form the other

State-owned Coal India Ltd, gas utility GAIL India and fertiliser majors RCF and FCIL will form two joint venture this month for revival of Talcher urea plant in Odisha at a cost of Rs 8,200 crore.

The first JV will be for setting up of an upstream coal gasification unit where GAIL will have a majority stake. The second JV part involves setting up of a urea-cum-ammonia nitrate complex where Rashtriya Chemicals Fertilisers (RCF) would have majority stake, sources said.

The plant will have a capacity of 1.2 million tonnes per annum.

The first JV will be named as 'GAIL Coal Gas Ltd' with GAIL having majority stake and the second JV will be named as 'Talcher Fertilizer and Chemicals Ltd', sources added.

"First JV will make gas from the coal mined and provided by Coal India (CIL), while second JV will manufacture urea using gas supplied from first JV as feedstock," a highly placed source said.

It is estimated that the plant will require an investment of Rs 8,200 crore, a source said.

This is perhaps the first greenfield plant in the fertiliser sector in almost last decade or so and it is also the first plant which will use coal gasification technology, sources added.

FCIL had signed a MoU with RCF, GAIL and CIL in September 2013 for revival of this plant, which was closed in 2002.

The Board for Industrial and Financial Reconstruction (BIFR) had de-registered FCIL on June 27, 2013, thus paving the way for revival of its closed urea plants. This happened after the government had approved the proposal to revive five closed units of FCIL at Sindri, Talcher, Ramagundam, Gorakhpur and Korba.

The government had also approved the waiver of loan and interest amounting to Rs 10,644 crore to FCIL last year.

Meanwhile, the old equipment, plant and machinery cannot be used in the new unit and is worth only scrap. This scrap is being sold to make way for setting up of a new plant.